The importance of repeat businessOpinion ·
Have you ever received one of those “15% off on your next order” coupons with your online shopping package? Even if you didn’t buy from the brand ever again, we’re sure that the idea of getting a discount on your next purchase made you at least consider it.
That’s a common practice to encourage repeat business. Brands include discount codes or special perks that can be redeemed on future purchases to retain customers in the long-run. In this blog, we will look into why companies are built on customer retention and how you can maximize the chances of your customer returning for more.
What is Repeat Business?
Seeing new customers signing in or giving your product a try is an incredible adrenaline rush for sure. But what is this new customer acquisition costing you? Will they help you reach your desired market position? Do consider the fact that it costs roughly five times more to get a new customer than it is to retain your repeat buyers.
The end goal in any business is to make a profit through selling products or services. There are two ways you can go about this:
- selling to a client base that has previously purchased from you,
- getting new clients to give your brand a try.
Both aspects are important for the growth of businesses. Most brands try to strike a balance between these two ways of making sales. But successful businesses focus more on retaining their existing patrons and numbers support that: 80% of your revenue is generated by just 20% of your buyers.
This 20% is composed of people who buy from the brand regularly, and can therefore be defined as repeat customers. Successful brands focus on them because they understand the transactional value of meeting the needs of their current consumers.
Why is customer retention pivotal for business?
What’s the most valuable asset for any business? Their unique product? Great customer service? They play a significant role for sure, but what truly makes any brand stand out is its consumers. Repeat business is the main differentiating factor between a business that thrives and one that fails.
Here are some statistics that help explain why customer retention is mission-critical for any company:
- In the long-run, loyal buyers are expected to be worth ten times more than they spend on their first purchase.
- 82% of companies find the acquisition process of new customers to be pricier than retaining old ones
- Trust in a brand is what keeps 83% of your consumers loyal to your company.
- The annual cost of customers switching to a new brand is estimated to be around $1.6 trillion.
Top 3 reasons why repeat customers are worth the effort
Do you still feel that not acquiring new customers regularly spells doom for your brand? Focus instead on bettering the experience for your loyal buyers. Here are three ways repeat business helps your brand prosper and improve your brand image.
1. It helps you save on your marketing strategy
Attracting new clients means you must always be on the lookout for how you can improve your products and deliver a better service. New packaging, exciting new features, or additional services – you name it. Secondly, you must constantly invest in marketing your brand on different advertisement frontiers.
That approach costs you in resources as well as manpower. Repeat customers are already familiar with the value you offer. Meaning your advertisement resources can be invested elsewhere to generate more revenue.
Improving your product is another way your repeat customers help you preserve resources. Research and development of new products is a lengthy and expensive process. Here’s where brand patrons can help you. Loyal customers help you do just that by offering insightful feedback.
By communicating more with your customers, both parties can benefit. Your customers will feel heard and resonate with your brand more and you will gain insightful feedback.
Layerise leverages these benefits in the favor of your brand and keeps you one step ahead of the competition by providing you with customer feedback that gives you better insight into what your customers want from your brand.
Be it a new product range or making changes to existing merchandise, understanding the needs and expectations of your client base helps you deliver exactly what they value.
2. Repeat customers don’t come back alone
Every relationship is built on trust. The one you have with your clients is no different. The good news is that once you win the trust of your customers, they will be more than happy to recommend your brand to friends and family.
It’s a fact that word-of-mouth helps bring in more business than the most laser-focused marketing ever can. Working on your customer retention is even more crucial if your business is not a brick-and-mortar store. Even though things are improving on the e-commerce scene, trusting online businesses can still be a leap of faith for most customers. Your brand’s patrons bring back 50% more new customers than single-time buyers.
Once you build that trust with customers through the quality of your products and excellent customer service, you recruit them as free brand ambassadors. According to this report by Yotpo, 60% of customers are quite vocal about the brands they love among their friends and family.
Social media and online reviews add a new dimension to this equation. Brand patrons can now share their buying experience with everyone on their friend list. That augments the value of repeat business and what it can do for your brand image.
3. Repeat customers are bigger spenders
Just a 5% increase in your customer retention rate could mean an average increase of 75% in your bottom line. That’s possible because repeat customers are easier to sell to. They often spend more in your physical store as well. Investing in repeat business is a surefire way to reach your business goals while spending less.
Think about it. When trying out a new brand, would you feel comfortable spending heavily? Probably not because you don’t want to risk ending up disappointed. Your customers think the same way. A customer's first purchase from you is most likely not a large one.
Once they approve of your product’s quality, features, services, and experience you offer, they will be more comfortable making larger purchases. That’s where most of your profits will come from and how your marketing strategy will be a success.
Layerise helps you retain your customers
Repeat business is not just good luck or great products, it’s a science and a skill you can hone as well. Layerise helps you improve your customer retention rates by creating a superior customer experience.
With Layerise, brands can collect relevant customer data and leverage that information to create personalized shopping experiences. By combining unique customer experience abilities with CRM and marketing, Layerise can help brands establish strong customer relationships with their clients and build continuous revenue streams.
Layerise can help you offer your customers instructional and interactive content, self-service support, and real-time 24/7 assistance through the chat feature. With the data collected during the onboarding process you can also build automated marketing campaigns based on their target audience, make their send-outs personal, and increase conversions.
The advantages of getting more repeat business are the same across different industries and companies. Layerise uses first-party customer data that guide your business and marketing strategies. Ready to up your customer retention game? Book a free demo now!
If you wan to improve customer retention, measuring customer experience is crucial.
Data is essential to you guide your company to success.
Customer satisfaction is not the only goal of customer service.