Business Tips

How to Turn Your Customers into Repeat Customers

October 25, 2024

Generally speaking, the cost to acquire new customers for your business is usually much higher than you think. For this reason, getting repeat customers (customers who have already purchased from you) is key to growing your business.

In this overview, you’ll learn why repeat customers will keep your business growing, how they can simplify your sales process, and strategies to get the most out of those who have already given your business a vote of confidence.

Why do you want repeat customers for your small business?

Whenever you sell to a repeat customer, the hardest part of selling to them is already done. You’ve convinced them that you’re trustworthy and can solve their needs. This is why it’s easier to sell to repeat customers. This clientele also:

Speeds up the sales process because your salespeople don’t need to spend as much time getting to know your customers’ needs.
Saves you money because repeat customers can be incentivized at a cheaper cost. You can offer discounts to your current customers to encourage them to make a repeat purchase, and that’s less expensive than advertising and selling to a new customer.

Beyond the cost savings, your repeat customers can also be advocates and champions for your business. People are more likely to buy from a business that’s been recommended to them by a trusted friend or family member, and your repeat customers likely have something positive to say about your business.

How can you get repeat customers?

Before implementing any other strategies, it’s important to have systems in place to measure your repeat customers’ impact. That means first setting up a good customer relationship management (CRM) software to capture information about your customers and set a baseline. Some of the metrics you can watch are:

Average Customer Lifetime Value:This shows how much money, on average, each customer spends with your business over the course of their entire relationship with your brand. Raising your average lifetime value means that you’re getting your customers to spend more by either purchasing more expensive goods and services or getting them to come back as repeat customers.

Purchase Frequency: This statistic measures how often a typical customer makes a purchase with your business. You can use the purchase frequency as a guide for when and how often to contact your customers about new offerings.

Once you’ve got your systems in place and have a good handle on the stats above, you can try different strategies to attract repeat customers. Here are a few to explore:

Consider the entire customer experience

If your business isn’t getting repeat sales from the same customer, you’re likely not considering your offerings as part of a value chain. Most of your ideas for products or services come from a specific customer need, but without a thorough analysis of your customer’s whole situation you’re missing out on additional sales.

Let’s use the mattress industry as an example:

For many years the mattress industry focused on making mattresses that people wanted and offering home delivery. As a high-priced item, mattress sales involved convincing customers of the quality and value of the product before they seriously considered making a purchase.

Mattress companies found out how to get people to buy a mattress and how to get it to their home, but the relationship ended there. Once a customer purchased a mattress, the product had a long lifetime with many years passing before another purchase, and it was common for people to switch brands each time they purchased a mattress.

To address customer turnover, startups in the mattress industry made a 360-degree customer view. This exercise looks at all the phases of your customer’s needs on a much deeper level, from the pre-purchase experience, through purchase, and into the post-purchase experience. This analysis considers the functionality of an offering and why your customers want to purchase in the first place, giving a much deeper understanding of their needs. The elements of the 360-degree customer view are:

Pre-purchase:

How does your customer identify that they have a need?
How does your customer identify the products or services that can fulfill that need?
How does your customer seek out information about brands that can offer those products or services? How is that information presented to them?

Purchase:

How does your packaging, displays, testing, and demos affect customer’s consideration?
What effect do your sales staff have on the purchase decision?

Post-purchase:

How do your customers receive the product or service?
What support do your customers have while they use your product or service?
How does your brand keep in touch with customers?
How do customers end their use of your services or dispose of your products?

Then the cycle starts over and the customer re-enters the pre-purchase phase.

In the past ten years, start-ups have innovated the mattress industry and used this type of analysis to deliver greater value. One innovation was introducing free pick-up for old mattresses when buying a new one. This was a service that most mattress companies weren’t providing but was desperately needed as mattresses are difficult to get rid of. As a result, new entrants into the mattress industry were able to disrupt the business model and increase the rate of return and re-purchase by their customers.

Create offerings that solve problems at different stages for customers

Creating offerings for different stages of your customer needs is critical to ensuring repeat business, especially in business-to-business (B2B) sales. There are two strategies to approach this:

Understanding customer growth: The first step to Understanding how your client grows over time is identifying how they use products and services. How will the same products and services be used by businesses of different sizes? For example, the way that supplies are bought and used by a newly started small business is different than how a business with $5 million in sales buys and uses supplies.

As your business grows and starts making larger orders, vendors can give more customer service during the buying process and can customize orders. By customizing your offerings to businesses of different sizes, you can stay relevant and continue your business relationship.
Understanding your customer’s big-picture goals: You need to understand what other services your customers need to achieve their goals – your products or services are just one of many that they need to complete their projects. Understanding the workflow that your customers have in completing their projects can help you design new offerings for them and get repeat business.

For example, let’s say a business is building out a new e-commerce website. This requires user experience design, website development, payment processing capabilities, and more. Many website design businesses offer add-on services that provide a payment gateway to their clients, so they can get them first as a customer for building a website and then as a customer for handling payment processing on that website.

Pursuit can help

Pursuit offers financing and resources to ensure all business owners have a path to success. We offer a range of financing options for small businesses in New York, New Jersey, Connecticut, Pennsylvania, Illinois, Nevada, and Washington. You can get the financing you need with more than 15 loan programs and a line of credit, and grow your business with insightful information and resources, and business advisory services for small business owners.