The repeat customer is an often overlooked treasure trove for your business! Here’s how focusing on bringing customers back can have a major impact by building your business, saving you money and increasing your sales.
It’s true that the success of every business depends on a mix of new customers and repeat customers, but which should you be focusing most of your marketing efforts on? Getting new clients is undeniably exciting and can sometimes take the focus away from cultivating repeat business, but there are many impactful business benefits that you should consider when deciding whether to market to new or existing customers.Here are three great reasons to tailor your marketing strategies with the repeat customer in mind.
1) A repeat customer will spend more
When thinking about the value of a repeat customer there are two factors to consider: first, how often they come back and second how much they spend per purchase. When a customer has a good experience, they will not only come back more often, but they will also spend more per purchase. Research suggests that a repeat customer spends 67% more than a new customer. This is due to a variety of factors, including the customers becoming aware of other services that you offer.
2) Repeat customers save you money
Did you know that it generally costs 6 to 7 times more to acquire a new customer than to retain an existing one? Another way to look at this is that the probability of selling to an existing customer is 60-70%. On the other hand, the probability of selling to a new prospect is much lower at 5-20%. Knowing these stats, you can see how much more profitable it can be to spend your efforts on trying to get a customers to return than focusing solely on drawing in new customers.
3) Repeat customers typically make up the majority of your business
According to a study by BIA/Kelsey/Manta, small business owners on average generate 51% of their revenue from repeat customers, but this number is even higher in the salon industry. Another study by the National Restaurant Association in 2012 found that repeat customers make up 68% of sales at fast-casual restaurants, which rely on proximity as a major factor in client purchasing decisions. With more than half of revenue coming from return business, it’s not an area your business can afford to ignore when it comes to marketing.
As you can see, there is great potential benefit to your business in turning your first time clients into loyal repeat customers.
Bonus stat: Why the ‘second sale’ is critical
In some ways, the most important sale you will ever make with a particular customer is the second sale. This is the sale that can turn the new customer into a valuable repeat customer. Some research suggests that a new customer has a 27% chance of visiting again. In contrast, if they come back a second time, the odds of them making a third purchase jump to 45%. The takeaway here is that once they come back a second time, the probability that they will come back again improves and should make your like a little bit easier.
So how can you improve your chances of bringing customers back?
Did you know email marketing is one of the most effective ways to reach your clients? Bizzy is designed to take the hassle out of email marketing for small businesses on a budget. Bizzy can help you capture your customers’ emails and send out perfectly targeted emails to get your customers to come back more often. Bizzy is the easiest way to make sure your customers get the right message at the right time. Learn more here!
Also check out our Bizzy blog for tons of great tips on growing your repeat business!