Knowing the value of returning customers is now more important than ever
2020 has been a year to remember with us living through circumstances that we could never have imagined. As businesses start to get back to a ‘new’ normal, there are lots of ways you can make sure that you don’t just survive but continue to thrive and grow.
Regardless of the size, and usually, nature of your business, attracting loyal, returning customers is the key to growth and expansion.
One important aspect to be considered is the importance of your best customers. Often businesses focus more on acquiring new customers rather than giving attention to returning ones. These people are the ones that have helped you in the past and made you the successful company that you are today – repeat customers are the foundation of a profitable business.
According to SumAll, 25% to 40% of the total profits of most businesses originate from these returning customers. Moreover, having steady customers can help your business in overcoming an economic crisis like the one we are currently experiencing. Businesses that have at least 40% repeat customers will likely generate almost 50% more revenue compared to those that only have nearly 10% of repeat customers.
Repeat customers are those who have made more than one purchase. These repeat clients will most likely purchase from you again and again. There is a 27% chance that your customers will buy from you again after making their first purchase if you know how to pursue them. The more these customers will visit your store or website, the greater the chances that they will be loyal to you.
Studies have shown that the cost of keeping an existing customer is around 10% of the cost of acquiring a new one.
It’s much easier to sell something to an existing customer than it is to sell to a brand-new one, as you have begun to build up trust. Many businesses put together a retention strategy to increase customer profitability and to understand how they can prolong relationships, therefore keeping costs down.
Benefits of repeat customers
There are several associated benefits to fostering a lasting relationship with customers, including the fact that long-term customers are more likely to introduce your business to others via word-of-mouth recommendations. They are also more likely to purchase other products from you.
Businesses maintaining good customer relations and keeping people loyal and satisfied, usually create a happy workforce, with increased job satisfaction as there are fewer problems. However, to achieve this you need to understand your customers’ needs, and it makes sense to know as much as you can about your new and returning customers. Having access to customer data is vital to ensure that resources are not wasted, promotions and marketing efforts are successful and that customers are coming back to repeat purchases.
Keep as much customer data as possible, as trends and patterns can help you understand what motivates customers to buy, and the best approach to take in your marketing activities. They can also be used to help build customer awareness of your new products and services.
As a NetPay merchant, you will have free access to our award-winning Revolution Platform where you can find reporting, insight and analytics about your customers at the touch of a button.
Please contact us on 0333 311 0200 to find out more. Explore the details below from More Than Accountants.