Focus on repeat business and make more profits
When it comes to marketing and generating more revenue, I find that most business owners are focused outward.
They’ve carefully established and segmented their target market, and created specific offers and messages for each market segment. They spend thousands in advertising and direct mail campaigns in hot pursuit of more leads, more customers, and more foot traffic. Exactly what we’ve been working on.
This is an effective way to build a business. However, it can be costly and time consuming. It requires constant and consistent effort, which generates great results, but in order to keep generating results you have to keep putting in the effort. Plus, at the end of the day you’re spending money every time a sale gets rung through the till.
A repeat business strategy means focusing inward – on the customers you have already converted. You’ve paid to acquire their business, so it’s worth a little extra effort to maximize that investment and get that customer to come back and purchase again.
In this article I’ll cover:
- A review of the cost of your customers
- The factors that impact repeat business volume
- A step-by-step process for boosting your repeat business
- Strategies you can implement to boost your repeat business
Let’s review the customer acquisition cost for your business.
Each new customer that walks through your door has cost you money to acquire. You have spent money on advertising and promotions to generate leads and turn those leads into customers.
Generating more repeat business means focusing on the marketing strategies that aim to keep your existing customers instead of purchase new ones – effectively reducing the cost of attracting new customers to your business by spreading it over multiple transactions.
Repeat customers create a community of people around your business that presumably share the same needs, desires and frustrations. The information you gain from these customers (market research) can help you strengthen your understanding of your target audience, and more accurately segment it.
Remember – 80% of your revenue comes from 20% of your customers. Always focus on these customers. They are ideal customers that you want to recruit, and hold on to.
Cultivating repeat business is a smart move because you’re leveraging time and money that you’ve already spent. Here’s how you can do it for your business:
- Find out what your customers want.
You need to find out what they need from and think about their experience with your business. You need to figure out what is important to them and what they may not care about.
Here are some ways you can do this:
- Conduct a survey of your existing customers.Create a short customer service feedback survey, and ask all your customers to complete it. You can easily do this through online survey programs, or hand out in-store cards. You may need to provide an incentive for customers to fill it out – like 10% off their next purchase, or a chance to win a prize. Keep the survey short – about 10 questions – and focus on asking a mix of multiple choice and open-ended questions.
- Cultivate meaningful relationships with your customers.If it is appropriate, nurture a social relationship with your clients. Take them out to lunch or dinner, or a sports game. In these relaxed environments, you’ll be able to easily learn new things about your customer that will show you how you can go above and beyond their expectations.
- Go to trade shows and industry events that matter to your customers.This will give you insight into what your competition is doing, as well as what products or services your customers are interested in. Remember that if your customers are keenly interested in a topic – like the environment, for example – that is not directly related to your business, you may also benefit from attending.
- Keep on top of trends and anticipate needs.Keep on top of trends in your industry so you can stay up to speed and on par with the competition. Also, if you follow what your customers are doing – if, for example, they’re athletes or high-powered businessmen – you’ll be able to anticipate their needs.
- Always ask for suggestions and feedback.Provide an ongoing place where you customers can provide their feedback or suggestions in an anonymous form. Review these cards regularly, and make changes and improvements where possible.
- Give your customers what they want.
Now that you have cultivated a greater understanding of what matters to your customer base, you can start giving it to them! Here are some general suggestions for ways you can enhance your customer’s experience.
Remember to take their feedback and incorporate it wherever possible. Don’t be afraid of getting creative – unique touches will make sure your business will be remembered and revisited.
Here are some guidelines for enhancing your customer service:
- Everything you do should be customer-driven.The service the customer receives is exactly how they would like to be treated when buying your product or service. It is reflective of your target market, and appropriate to their lifestyle. Customers would probably not appreciate white linen tablecloths at a fast food restaurant, but they would appreciate a 2-minutes or less guarantee.
- Make your customer’s life as easy as possible.Your customers are coming to you for a solution to their problem or need. They’re coming to you to make their lives easier, so go a step further than just providing the product or service they need. Make it nearly effortless for the customer to spend money at your place of business. Convenience can take many forms – location, product selection, value-added services like delivery – and it is also consistent.
- Be consistent with your products and services.The standards you establish for customer service need to be maintained by every person in your organization. The same goes for every product in your business. Expectations should be clear and followed through on. When customers know what to expect (and are happy with the service), they will choose your business because they trust that you have their best interests in mind. They want their buying experience to be risk and surprise-free.
Ideas for giving your customer more than they expected:
Adding value to your business is an effective way of getting your customers to come back. Every person I know would choose a mattress store that offered free delivery over one that did not. It’s that simple.
Value added services generate repeat customers in one of two ways:
- Impress them on their first visit.Impress you customer with great service, a product that meets their needs, and then wow them with something extra that they weren’t expecting. Get them to associate the experience of dealing with your business with happy surprises, and create a perception of higher value.
- Entice them to come back.The introduction of a new value-added service can be enough to convince a customer to buy from you again. Their initial purchase established a trust and knowledge of your business and its processes. They will want to “be included” in anything new you have to offer – especially if there is exclusivity. It is easier to attract clients that have purchased from you than potential clients who have not.
- Feature your expertise.Use your knowledge to provide additional value to your customers. Offer a free consumer guide or report with every purchase.
- Add convenience services.Offer a service that makes their purchase easier, or more convenient. The best example of this is free shipping or delivery.
- Package complementary services.Packaging like items together creates an increase in perceived value. This is great for start-up kits.
- Offer new products or services.Feature top of the line or exclusive products, available only at your business. Offer a new service or profile a new staff member with niche expertise.
- Keep in touch with your prospective, existing and past customers.
Use newsletters to educate customers on a regular basis.
A newsletter is a helpful tool for keeping in touch with (and in the minds of) customers. A regular newsletter is an easy, time-effective, and inexpensive marketing strategy to implement.
The most popular type of newsletter distribution is email. This will cost very little for an email marketing service subscription, and can be customized to your unique branding.
Newsletters can drive your repeat business through education. It is an opportunity to showcase your range of products and services – many of which you customers may not know about and thus.
- Give your customers an incentive to return.
Another powerful way to build your repeat business is to provide your customers with incentives to return. Even if they were planning to come back already, this will drive a faster return spend and you’ll see results sooner.
Offer a rewards-based customer loyalty program.
These programs do not have to be complicated or costly, and are relatively easy to maintain once they have been implemented. These programs help you gain more information on your customers and their purchasing habits. Here are some examples of simple loyalty programs that you can implement:
- Free product or service with x-number of consecutive purchases.
- Rewards dollars / pounds.
- Rewards points.
- Membership amenities.
Remember that for this strategy to work, you and your team have to understand and promote it. The program in itself becomes a product that you sell.
Provide a free sample with every order.
It won’t matter how large or small the sample is, everyone loves to get something for nothing. Just make sure it’s relevant to the buyer. This strategy will benefit you in two ways:
- Your customer will get something for free.Like I said – everyone loves to get something for free. This should impress your customer, and it will encourage them to come back and purchase again knowing that they’ll receive more for their money at your business.
- Your customer will be exposed to something new.As I explained above, education can be key to your repeat customer strategy. A free sample will allow you to expose the customer to a new product without asking for their money. This also may pique curiosity in other items you sell that they were unaware of.
This is a strategy that can be as simple or as elaborate as you like. You could stuff shopping bags with random free items, or attempt to connect your buyer to an item they would be interested in. Kiehls – an American skin and body care company – offer their clients three free samples with every purchase. The client chooses which samples they are interested in trying, and the samples are scanned into the customer’s account using a barcode. This allows the company to track which products their clients are most interested in, as well as when the sample leads to a sale of the actual product.
Give each customer a post-checkout coupon for in-store spending.
Provide your customer with an incentive to come back and make another purchase immediately after they check-out. This can be a voucher for in-store spending, or a discount on a complementary item to their first purchase. For example, if they buy a home entertainment system, offer $/£ 50 off a new T.V.
Offer an automatic re-order option on all purchases.
This mostly applies to companies that sell consumables, such as person maintenance products, medication, groceries, and vitamins, etc., but it’s a great tool for getting automatic repeat business. It also works well for subscriber-based companies.
When your customer makes their first purchase – either in-store or online – provide an option where they their purchases will be made automatically, and either shipped or available in-store for pick up. They can cancel at any time, but this way they don’t have to worry about continually coming in to re-order their prescriptions or toiletries.
- Measure the results, and make changes based on your findings.
Make sure you’re keeping track of repeat customers both before and after your implement your repeat business strategy. You’ll need to be able to evaluate if your strategy is working, and if the time and effort you are investing is justified by the increase in sales. If it’s not, try another strategy or make small changes.
Also consider using an exit survey to gather feedback from customers who don’t return to your business. What can you do to improve? How can you change your offering to encourage them to buy from you more than once?
Remember, your best strategy for generating repeat business is genuine customer service and a quality offering.
The simplest way to keep customers coming back is to treat them the way they want to be treated. Usually, this means making sure your customer service standards anticipate needs and reduce hassle.
Before you dive into complex customer loyalty programs or frequent newsletter distribution, remember that your first goal is to meet your target market’s needs and exceed their expectations. Once that is your foundation, then build on your success using strategies like incentive-based loyalty programs and regular email communication.