It’s no secret that repeat customers are good for business, but new statistics suggest they do even more for your bottom line than originally thought. A recent analysis by SumAll, an analytics company, revealed that 25 – 40 percent of the revenue of the most established businesses in the company’s network comes from repeat customers. Further, the analysis showed that the more repeat business a company has, the higher its revenue.
Loyal customers are invaluable to sustaining a business, but what can a company do to create them? Here are five strategies that will help you improve the percentage of customers who return.
1. Start off strong
First impressions can make or break your customers’ long-term loyalty, so it’s important to provide superior customer service from the very beginning. Once a customer experiences a great level of service that can’t be found elsewhere, they will come back not only for your product but for the experience.
2. Reward Loyalty
Profit margins on the purchases of repeat customers are higher than those of new customers because there are no costs tied to acquiring them. To build loyalty, you need to reward it. Offering a rewards program or a loyalty card is one option, but that’s not the only way to show your appreciation. For example, you might send a thank-you note to customers with an exclusive discount code for future purchases.
3. Stay in Touch
Regular communication with customers is imperative to retention. Reach out to customers through a newsletter, emails, surveys, or social media to send updates and offers. Twitter is especially useful for businesses as an easy way to keep in touch, and some companies might also benefit from a smart phone app to further engage with customers. According to TechRepublic, not only do these apps allow you to better target local customers and collect data about their behavior, but they also offer the opportunity for more comprehensive customer support.
4. Get Personal
You can’t keep customers coming back if you aren’t attuned to their needs and wants. For this reason, every company should have some form of a customer relationship management (CRM) system to collect and track information about customers, such as buying history, contact information, and birthdays. Microsoft CRM Online is one such example. With this information, you can give your customers a personal touch by sending a birthday card or email with a discount on a favorite product.
5. Keep It Fresh
For companies that do a lot of sales through their websites, customers have little incentive to check back often if the content rarely changes. Keep your site dynamic by updating your content regularly and consider adding a blog. Fun, interesting blog posts, especially those linked to social media, encourage customers to visit the site regularly and afford an opportunity to share updates or highlight new products.
6. Respond Quickly and Positively
Customers who feel acknowledged and heard are more likely to return, so make sure your staff responds to comments and questions in a timely, positive way. Have customer service reps monitor your channels of communication and respond within a specified time period. Keep these interaction positive, particularly when customers have complaints.
Keeping a customer loyal starts from the initial meeting, and superior customer service from the start will have them coming back for more. When a customer feels that they’ve treated with respect and friendliness, the perception of your company in the mind of your customers will trend positively, which in-turn will increase the likeliness of them coming back for more.
Remember that repeat customers spend more and cost less, so the return on your investment in them is huge. The aforementioned SumAll study suggests that companies devote about a quarter of their marketing spending to retaining these customers, focusing on delivering a positive, rewarding, and personalized experience. Doing so just might help to keep loyal customers around for years to come.
Source: Microsoft Small Business Blog