SECRETS TO REPEAT BUSINESS EVERY BUSINESS OWNER SHOULD KNOW
Here’s a fact that every successful business owner has learned over the years, often the hard way: It’s much easier to sell something to an existing customer than it is to get a new customer. It’s also cheaper—about five times less expensive than what it costs to win new customers.
When growing a business, it’s tempting to focus on converting leads into new customers or landing bigger accounts while neglecting current customers. Turning existing customers into repeat customers is vital for the health and success of any business, especially small- and medium-sized businesses.
IT’S MUCH EASIER TO SELL SOMETHING TO AN EXISTING CUSTOMER THAN IT IS TO GET A NEW CUSTOMER.
Existing customers are high-value assets who are far easier to engage and sell to than new customers. Repeat customers buy again and again. They also refer your products and services to new customers. Therefore, it makes perfect sense to invest in customer retention and repeat business strategies.
To achieve repeat business you need more than a good product or excellent service. Repeat business is won by providing an outstanding personal experience. Surely you’ve been in this situation:
- Company A offers a great product at a great price, but you may have to jump through hoops to buy from this company, or its customer service may be less than stellar.
- Company B may offer less variety or sell the same products at a slightly higher price, but the people there are willing to jump through hoops to make sure you’re happy with your purchase.
- Which company are you more likely to buy from again?
In the small- and mid-sized business world, everything is personal. You can offer a marvelous product or service, but if buyers don’t like you, it won’t matter—they won’t buy from you.
IF BUYERS DON’T LIKE YOU, IT WON’T MATTER
Consumers are more aware of how you treat them—and of how they feel when conducting business with you—that of the quality of the product or service you’re selling them.
Quality Matters, Trust Wins
When your buyers are happy with their purchase, you establish trust. Your current customers already trusted you at least once before. What is easier: to get them to trust you again or to get a stranger to trust you for the first time?
This is not a novel concept, yet business owners continually spend more resources marketing to new customers than catering to the customers that are right under their noses. Existing customers can become repeat customers with much less effort and expense.
Second Time Around
Every existing customer was once a new customer. At some point, that customer was faced with the choice of buying from you a second time. This second encounter is crucial for developing repeat business.
THE SECOND TIME AROUND IS WHEN YOU GRAB THEM OR YOU LOSE THEM.
The second time around is when you grab them or you lose them. Customers who make a second purchase are on their way to becoming regulars or repeat customers. These customers can then be converted into loyal customers who encourage others to buy from you.
The Wonderful World of Repeat Business
Study after study shows the value of turning existing customers into repeat customers. For example:
- According to the book “Marketing Metrics: The Managers Guide to Measuring Marketing Performance,” companies have a 60 to 70 percent chance of selling to their existing customers, while the probability of selling to new prospects is 5 to 20 percent.
- A report from global management consulting firm Bain & Co. reveals that when customer retention increases by 5 percent, revenue rises by 75 percent.
- Statistics by research and advisory firm Gartner Inc. show that 80 percent of your company’s future revenue will come from just 20 percent of your existing customers.
- According to Counting the Customer, a report by tech company Glance Networks, it costs six to seven times more to acquire a new customer than to maintain an existing one. Loyal customers are worth up to 10 times as much as their first purchase.
Proven Tactics to Boost Repeat Business
You’ve gone through tremendous trouble and expense to make the initial sale and get a stranger to trust you once and become a new customer. How do you encourage a second sale? And a third? What are the best ways to engage, resell and retain existing customers?
Tune in next week for a list of strategies the pros use to increase repeat sales and convert new customers into repeat customers.
Sources: Forbes, Entrepreneur Magazine, Inc. Magazine, American Express, Marketing Metrics, Bain & Co., NBC News, Neil Patel, Good Egg Marketing, Duct Tape Marketing, InsideSales.com, Marketing91, Remarkety.