Five Reasons You Should Focus on Repeat Customers Rather than New Ones

Small businesses spend much of their resources acquiring new customers, in order to spread the word about what they do best, and often over look the value of a long standing relation ship with customers whop already know, like and trust their company and the value they bring to the table.

Here are five points around the ideal of customer retention, and why it is often the overlooked gold mine businesses are often striding for. With just a slight change in mentality, and by focusing on providing a second to non customer experience, can have a HUGE impact on your profits.

1. Repeat Customers Are Easier to Sell To

With limited time and resources, and sometimes even knowledge – you want to make the most of your marketing cash, and market to the right people, so by applying this ideal, and putting some of your well earned cash into building a stable and recurring customer base would be a wise step.

Adobe conducted a study and found that repeat customers are nine times more likely to purchase again. This is dramatic, considering the average conversion rate in digital marketing is between one and three percent.

Centring your attention on first-time shoppers can take more time and money. Therefore, economically, selling to a repeat customer is much more cost-effective. if you look after your current customers, they will become your biggest advocates, and in turn spread the word of your business, doing the hard leg work for you in acquiring new customers.

2. Retained Customers are Likely to Spend More Money

Repeat customers have already experienced your product and are well on their way to building a good know, like and trust relationship with your business, allowing they to make smarter choices when buying again from you.

Repeat customers are, therefore, more valuable. A seasoned customer spent 67 percent more than a new one in a recent study from Bain & Company. By already knowing the product and having a stable relationship with your business, they can do smarter shopping, which often leads to spending more money.

3. It is More Expensive to Acquire New Customers

Again, the value of time and resources appears. You want to conserve as much of these as possible while churning out a considerable profit. This is where the repeat customer becomes much more efficient and far more valuable.

According to Amy Gallo from Harvard Business Review, marketing and engaging a new customer to spend in your business is between five and 25 times more expensive than an existing one. (The variation of the cost depends on the industry).

As a small or midsize business owner, you do not have unlimited resources. Focus on what can get you the most money now; build a stronger relationship with repeating customers.

4. Repeat Customers Spread the Word on Your Business

Marketing is expensive – for any business. If you have a smaller operation, then there may not be any funds in the budget to purchase an ad or hire ambassadors.

The next best thing is to concentrate on your service and word-of-mouth advertising. Happy customers are excellent sources for publication of your messages. Plus, people are more likely to count on their word.

Fixating your attention to new customers feels like it would help promote your business in word-of-mouth advertising. While this seems like a reasonable idea, it may not be the most efficient.

According to Bain & Company, repeat customers refer more people to a business, on average. After ten purchases, a repeat customer referred to an apparel site seven times, compared to the three times after the first purchase.

This word-of-mouth advertising is very profitable, as referred customers spend about 50 percent more. The study applied to online grocery and apparel stores, but this can be applied to other sectors to. The ideology is simple, by looking after your true loyal customers, they will become your biggest advocates for the value your business provides, and therefore,. they will help you shout about what your business does best to their friends and family…. and so on.

5. Repeat Customers are More Likely to Become Regulars

After experiencing your store, products, or service, returning customers are more likely to come back again and again.

According to Marketing Metrics, only 10% of customers revisit a business after the first visit. However, this number grows as the customer returns. A regular customer, who shops consistently, is 60 to 70 percent more likely to purchase.

To encourage satisfied repeat customers, small and midsize businesses develop loyalty programs, and daily, regular engagement with their regular customers. You can add a personal touch by sharing relevant news and information or personalising the rewards they get.

Overall, though, the essential quality to have while encouraging repeat customers is over-the-top customer service.

Happy customers are more likely to come back, spend more money, and promote your business. 

To conclude, repeat customers are cheaper to sell to, and they may even be more fun to interact with, seeing as they already have a pleasant experience with you and your business, ultimately becoming your biggest advocates.

Roam for Business – Generate customer loyalty

By choosing Roam for your business, we can help you focus on your customer retention for further profitability.  Here are a just a few benefits that  can help your business:

• Send your customers push notifications direct to their phones, with any news, offers, events, loyalty deals and discounts or other offerings
• Use Roam’s click-and-collect alternative
• Create a loyalty club for your customers – existing customers are 40% more likely to buy your products
• Share new product releases to your customers with any exclusive offerings, menus and other services
• By claiming your listing on the Roam app, this effectively becomes your own app
• Drive desired actions like buying again or up-selling
• Communicate your brand values to increase loyalty and repeat revenue
• With our algorithms, we are able to drive customers to your doors
• It’s free to claim – simply add all your images and other information, and you also get 4 inclusive push notifications each month