Repeat business is a term used to describe when clients or customers shop or make use of your services repeatedly. There are many ways to ensure repeat business, including loyalty programs, VIP customer service, discount coupons and of course, freebies.
Experts claim that an increase of 2% in customer retention is equal to cutting operational costs by as much as 10%.
It's no easy feat earning sales from a customer. Depending on which industry your business falls under and the price of your products or services, it can take weeks to months to entice a customer to do business with your brand.
Even if your business is in the retail arena, where impulse buying is rife, the first purchase is always the hardest to achieve. Through careful retargeting and encouragement of repeat business, you'll be able to grow your bottom line without the need of increasing your marketing and advertising efforts.
What is repeat business, and why does it matter?
Repeat business, also known as customer retention is when a client does business with your company repeatedly. In the best-case scenario, these customers become loyal advocates of your brand and continue to shop with you regularly.
But exactly why is repeat business so important? Here are some reasons:
Businesses flourish with customer retention. One of the main reasons why repeat business is essential is the fact that most companies are built with the aid of faithful customers who shop with a brand regularly.
Word of mouth. Repeat business is also vital as loyal customers tend to promote your business for free. Once a customer discovers a brand which they love and frequent, they're likely to promote the company to friends, families and to people who follow them on social media.
Money. An obvious benefit of repeat business is more money. Customers are usually happy to spend more than usual at a store they trust.
Customers are eager. Furthermore, repeat customers are often easier to pitch new products and services too. As they already trust your brand, it's far easier to sell them on new products or services.
New customers cost more. Repeat business is beneficial as new customers often require more to bring in. Studies show that it costs as much as five times more to garners a new customer than it does to retain an existing one. Furthermore, it costs sixteen times more bring new customers up to the level of spending that your current clients possess.
Five simple tips to bolster repeat business.
In today's world, there are hundreds of ways of generating repeat business. Should you be on the hunt for a quick, simple and effective game plan, then these five strategies could aid you well.
1. Loyalty programs.
A tried and tested strategy in encouraging repeat business is to develop a loyalty program. Yes, you can get as complex as you'd like, but often keeping it simple is most effective. Gather your customer's details, create a unique account number or card and begin rewarding them when they spend a certain amount. Loyalty programs don't only encourage repeat business, but usually, they increase the average transaction amount.
2. Personalised customer care.
In our modern world, people are used to being treated as nothing more than customers. When you walk into your local retail store, usually nobody knows that you've been there hundreds of times before. It's obvious that if you want repeat business, this is not the way to treat your customers. The calibre of customer service you provide during a customer's visit will command their view of your business. Personalised service with proper attention goes a long way in building positive rapport and of course repeat business.
3. Award customers with coupons.
Many customers will visit specific stores in search of one item. Should they succeed in finding that item, they'll purchase it, but usually, they don't have many reasons to return. However, you can acquire these customers and encourage repeat business by offering coupons which they can use in the future. For example, for every purchase of R500 or more in your store, you could provide a coupon off 10% for a future store visit and purchase. By offering this, you give the customer a reason to return to your business.
4. Obtain your customer's contact information.
It should be any business's goal to obtain as much customer information as possible when they walk through the doors. By acquiring customer information, such as names, phone numbers and email addresses, you're able to reach out to customers in the future, thus having the means to alert them to sales, promotions and other deals. Now you're ready to engage these customers on your terms and not solely when they decide to make use of your business.
5. Everyone loves freebies.
A vital strategy for driving repeat business is ensuring that you're always at the top of your customer's minds. As soon as they depart from your store, you need to ensure that they remember you. This is why several businesses invest in free promotional materials. A branded t-shirt, pen, notebook or even free in-store products go a long way with customer retention.
The more a customer returns to your store and has positive experiences doing business with you, the more likely they'll return and tell their friends. To garner repeat business, ensure that you're doing the right things, start with these tips and you should be off to a great start.