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Where do you invest most of your business resources and time? Many businesses, unfortunately, spend most of their valuable resources by focusing on acquiring new customers. While customer acquisition can increase your revenue and brand awareness, the results are not that significant when compared to customer retention.
Repeat customers are significantly more value for your business than new customers because repeat customers are likely to bring in more profits for your business. Studies show that almost 80% of your future profits are likely to come from 20% of your repeat customers!
Hence, it is crucial for businesses to start focusing their efforts more towards retaining existing customers, turning them into loyal customers, and increasing their lifetime business value.
Before we dive into understanding the profitability of repeat customers, it is important to the definition of a repeat customer.
Repeat customers are those who return to your business, again and again, to make more purchases from you. Typically, a repeat customer has made at least two purchases from your company.
Returning customers are also known as recurring or loyal customers because they are loyal to your brand and are likely to make many more purchases from you in the future. Repeat clients also turn about to be the best advocates of your brand and bring repeat business.
The first rule of any business is to retain customers and build a loyal relationship with them, and thereby avoid customer acquisition costs. Not only do repeat customers convert more often, but they also have a higher average order value than first-time buyers. This means that your repeat customers are buying more from your store and more often.
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Nurturing your repeat customers and serving them the right way can massively increase your business profits. Here are a few reasons why:
A repeat customer has already made multiple purchases from your brand. Meaning, such customers are already familiar with your brand, they love your services, and have an affinity towards your company.
Hence, it is easier to sell your products and services to repeat customers than to new customers. With the same amount of resources, you can generate more purchases using repeat customers.
Acquiring new customers for your business by promoting your products can be much more expensive than selling your products to repeat customers. This is due to obvious reasons like repeat customers are already comfortable with your brand and prefer your products over your competitors.
Apart from higher conversion rates, the average order value of repeat customers also tends to be higher as compared to new customers. For every purchase made, a repeat customer is going to spend more money than a new customer, either through upsells or an increased quantity of orders.
Moreover, the likelihood of a repeat customer making frequent purchases from your brand is more than that of a new customer. Hence, promoting new products to repeat customers takes much fewer efforts compared to new customers.
Your repeat customers are loyal to your brand because they have had good experiences with you. Due to this, repeat customers are highly likely to promote your brand through word of mouth or social media. Hence your repeat customers have the added advantage that they refer numerous new customers to your business.
By now you know how valuable and profitable repeat customers can be for your business. Businesses can plan strategies to engage customers in a way that they become repeat customers.
Let us discuss some innovative ways to retain your new customers and turn them into repeat customers for your business:
Any business’ primary goal is to attain lifetime loyalty from customers, and this is easily possible by providing a best-in-class premium experience to your customers. And the most viable way to improve your customer experience is through excellent customer service.
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Here are some ways to deliver superior customer service.
An important aspect of good customer service is round-the-clock availability. Your customers may be joining from different time zones at different hours of the day, and they will expect you to respond to their queries as soon as possible.
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How bots help businesses to deliver better service.
REVE Chat offers a range of customer experience tools that can help automate your support. Sign up to empower your business with top automation tools and deliver value to customers.
Any customer feels empowered and confident about products only when they understand the entire features and benefits of it. Hence, without timely customer education and training, your customers are likely to be lost and confused about how to get the maximum value out of your products.
If you focus on providing high-quality comprehensive customer education, then your customers will be highly satisfied with your brand and will stick around for much longer.
Here are a few ways in which you can educate your customers.
A successful customer loyalty program can contribute heavily towards retaining your customers and turning them into repeat customers. In fact, a customer who is a part of your loyalty program is 47% more likely to make another purchase from you when compared to other customers.
The main reason is that loyalty programs have the power of making your customers feel valued, empowered, and more connected with your brand. Such a connection provides the right kind of motivation for your customers to lead them to make more purchases from your company.
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Here are the ways to increase customer return rate with loyalty programs.
Who doesn’t love discounts and offers? Everyone does! Hence you should start using offers and discounts to retain your customers if you haven’t done it already.
When your margins are tight, offering discounts might not be the best option for your business. However, offering discounts to new customers after their first purchase can prove to be highly profitable for your business.
Delight your repeat customers by following different ways of offering discounts & incentives.
Customer feedback is essential for the good customer experience of any business. Without effective customer feedback, you may be lost about what exactly your customers are looking for.
Customer feedback needs to be proactive rather than reactive because most of the customers won’t come to you telling about what extra features they would like to have. It is your responsibility to approach them and upgrade your existing products aligned with the feedback.
Here is how collecting feedback can impact your recurring customers.
Emails can be a powerful tool to drive one-time customers to make multiple purchases from you. By tactically strategizing each email that you send, you can significantly improve customer retention and thus generate repeat business with numerous loyal consumers.
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Tips to follow for email marketing to add value to returning customers.
Here are some shocking statistics about the value of repeat customers for your business:
To conclude, we can say that repeat customers are significantly more profitable for any business, be it B2B or B2C. By directing the majority of your resources toward customer retention strategies, you can skyrocket your business revenue and profits.
And when it comes to retention, engagement is still the best solution. With REVE Chat, sign up for advanced customer engagement tools and redefine the way you offer support.
The most important strategy for turning new customers into repeat customers is to provide the best possible customer experience and support. Through enhanced customer experience tactics, you can maximize your lead to repeat customer conversion rates.
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