Ok…
Let’s talk about repeat customers and why I love this segment of a business’s customer base.
If you noticed your ecom brand isn’t generating enough revenue and you want to make a change, what would be your strategy?
Where would you find low hanging fruit that would make an impact?
My answer? Hit up your customer base.
For many ecom owners, a large proportion of their marketing budget goes into the acquisition of new customers to increase revenue. While acquiring new customers is equally important for most business owners to convert them to repeat business, channelling your marketing efforts into customer retention can actually be more profitable for your ecom brand.
Why?
These repeat customers are usually loyal customers that increase their value to your business with every repeat purchase over a period of time.
You know the saying… “It’s easier to sell to an existing customer, than sell to a new customer”.
The reason for that is because your brand has established a “know”, “like” & “trust” factor with your customers. Provided your customer has had a good experience with buying your product and received a desired outcome, you’re in a strong position to convert them again.
Let’s get into five reasons why repeat customers are better than new customers.
New Customers Cost More
First reason up on the list is that new customers are more expensive to sell to. Keeping and selling to existing customers is much less expensive and has greater advantages than finding new ones.
Whether you’re a small brand or a big one, you should channel your marketing efforts into ensuring customer retention. The best way to engage in customer retention is through the likes of email marketing, SMS marketing, chatbots and of course, customer lists that are acquired on paid media platforms like Facebook, Google etc.
Use those customers lists to retarget this segment on paid media with upsells, cross sells and see your conversions and revenue increase.
Repeat Customers Spend More Money
The more times you are able to get a customer to make another purchase, the greater their potential lifetime value becomes. With the profitability of your brand in mind, you can encourage your new customers to keep coming back by enticing them with great deals.
The more often repeat customers convert, the higher their average order value compared to first-time customers. This is largely because repeat customers tend to make more purchases over time due to the development of brand trust, making them valuable for business success. Repeat customers offer business owners a high lifetime value, contributing to a higher value per purchase over a long period of time.
Repeat Customers Are Easier To Sell To
Like I mentioned at the start of this post, existing customers are easier to convert. Acquiring new customers is the goal of every ecom brand. But they cost more. When you have a customer that’s had a good experience with your brand, the chances of converting them again increases dramatically.
The point is not to waste too much time and resources on potential customers who may end up not buying anything. Ensure you are paying enough attention to your existing customers and putting efforts into your customer retention.
Repeat Customers Promote Your Business
Marketing campaigns can get expensive in terms of customer acquisition. If you have some brand advocates (customers who just love what you do), get them to become brand ambassadors for your products.
This can end up being a very effective way to acquire new customers and even drive more sales from existing customers.
Why?
Because these repeat customers and brand advocates will promote your brand in a positive way to their friends and family. The end result can mean new customers that didn’t cost you a penny.
I love how paid media can scale a brand’s revenue, but I am also a massive fan of referral marketing. Never underestimate the power of word-of-mouth referrals. Repeat customers can become your product marketers and acquire new customers for you at reduced costs.
The more customers return to make another purchase, the more new customers they refer to that brand. Your brand ends up in conversations with people over coffee, dinner etc These new customers, in turn, increase your brands revenue. By increasing your marketing efforts on existing customers, you will be able to create a group of loyal customers that will happily sing the praises of your business.
Your Brand Is Built On Customer Retention
A customer’s motivation in the market place is driven by value. I read a report by Manta and BIA/Kelsey that said –
“64% of businesses with customer loyalty make more money than it costs to retain them”
Repeat customers are a much-needed support that helps keep your ecom brand ticking over. Your existing customers have the largest short-term potential to increase your revenue at low sales costs. They also have higher chances of making referrals, spending more money, and forging meaningful long-term relationships with your brand. Just like we mentioned in the previous points above.
One way to enhance customer retention is through the use of a loyalty program. This can make a huge difference between succeeding or failing in your business.
Businesses that are able to incorporate customer loyalty will ultimately become more profitable than their competitors over time.
