What is a Repeat Customer? And How to Keep Them Coming Back
A repeat customer is a loyal customer who regularly buys from you. Their buying habits may or may not be regular or predictable. Over time, however, there will be an obvious preference for your brand.
Why are repeat customers profitable for your business?
Repeat customers are often the most profitable customers a business can have. Here are the five main reasons why.
- Repeat customers typically spend more money than either returning customers or one-off customers.
- They are often easier sales prospects than brand new customers.
- They can also be more willing to try new products and services.
- It’s easier to build on existing relationships with repeat customers than to attract new ones.
- Repeat customers are great brand ambassadors.
How to identify repeat customers
If you’re doing business online, you’ll automatically be able to link individual customers to their purchases. If you’re doing business in the real world, you’ll need to have a mechanism for linking individual customers to their purchases..
The most obvious solution is to have a Loyalty Program. This approach tends to be the simplest and the most effective, which is why it’s so widely used.
The practicalities of loyalty cards
Firstly, you will need to persuade the customer to sign up for your Loyalty program to begin with. Many companies offer a reward for doing so. Ideally, this should be something the customer can access immediately e.g. a discount on their first purchase. The sign-up process needs to be as quick and easy as possible.
Secondly, you will need to incentivise customers to activate the program every time they make a purchase. This was traditionally done by scanning a physical card. If you want to stick with this approach, you need to make sure that the card is easy to carry.
Increasing numbers of merchants are now switching to digital-first loyalty programs. These can be accessed through the phones that customers generally have with them anyway. They are easy for merchants to set up and easy for most customers to use.
Thank your regulars with a customer loyalty program.
Analysing your data
Once you have your data, you can calculate your repeat customer rate by using the formula:
(No. of customers who’ve purchased more than once/Total no. of customers) × 100 = Repeat Customer Rate (%).
If you wish, you can then fine-tune this to group your customers into cohorts based on their spending patterns.
(No. of customers who’ve purchased X times/Total no. of customers) × 100 = Rate of customers who’ve purchased X times (%).
You can choose to analyse purchases over a customer’s entire lifetime with your brand or to focus on a specific period; it can be useful to do both. This can allow you to identify people who used to be repeat customers but who have since become dormant.
You can then see if you can take action to turn them into returning customers. If so, then you have the opportunity to work on turning them back into repeat customers. If not, then at least you know not to spend your marketing collateral on them.
Seven ways to attract repeat customers and keep them coming back
Here are the 7 top ways to attract repeat customers and keep them coming back.
1. Deliver great customer service
It’s impossible to overstate the importance of continuously and reliably delivering great customer service. As the old saying goes, you only get one chance to make a first impression. If you blow that chance, then you may lose the customer completely. You will almost certainly lose the chance to make them a returning customer, let alone a repeating one.
Even if you make that great first impression, your work is far from done. You need to keep reaffirming it each time a customer comes to your store or walks through your door. Always keep in mind that repeating customers trust you. Trust is built up over time but can be destroyed in moments.
In short, the customer may not always be right but they are always the customer. If you want them to stay that way, then you need to make sure that your customer service is top-rate.
2. Utilise your loyalty program effectively
Loyalty programs only work if they offer customers something they really need or really want. You don’t have to offer the same benefits to everybody on your loyalty program. In fact, having different bands can encourage customers to give you as much of their business as possible. You do, however, need to ensure that all rewards are meaningful.
If you want to offer discounts, it’s often best to keep them in moderation. You might also want to consider making them time-limited. Look for other ways to deliver extra value to your best customers. For example, you give them the chance to buy exclusive goods/services or get early access to them.
You could also look for ways to turn your repeat customers into a brand community. For example, you could offer them exclusive access to events (real-world or online) and private social media groups. You could run competitions and giveaways and/or create exclusive content for them.
3. Make sure your pricing encourages repeat buying
Look at what your customers are buying and see what you can infer about what they might need or want in the future. Then think about how you can leverage your pricing structure to encourage repeat purchases.
For example, if somebody buys a printer, they’re also going to need paper and ink. You can offer them a time-limited discount on these. If they use it, then give them another one. Once you’ve established how often they need paper and ink, then consider offering them subscription pricing for a regular supply.
4. Collect and act on customer feedback
If a customer repeatedly shops with you, then they have a vested interest in helping you to improve your service. Ask them for feedback and be sure to act on it as much as possible.
If possible, reach out to customers periodically with more in-depth surveys. These will take more time to complete so offer some kind of reward for doing so. If you’re on a tight budget, then consider offering to enter all respondents into a prize draw.
5. Use social media effectively
Use social media to engage with people. Remember, you have two ears and one mouth, so that means listening at least as much as talking. What’s more, when you do talk, make sure what you say is engaging and relevant to your audience. It’s fine to self-promote some of the time. Just make sure that your promotion resonates with your community.
6. Re-engage with customers via email marketing
Email marketing is very far from dead. In fact, it remains one of the most effective forms of marketing. It’s particularly useful for reaching out to people who used to be repeat customers but have since become dormant or are on the point of becoming so.
Reach out to these people directly and remind them why your business captured their attention in the first place. If they are still in the market for your goods or services, this may be enough to get them to re-engage with you as customers. Even if it doesn’t, it may stimulate them enough to re-engage with you on social media.
Alternatively, it will prompt them to unsubscribe from your mailing list. This may be disappointing but at least you will know where you stand. You can try asking the customer to give feedback on why they are unsubscribing. It could simply be that your product or service has ceased to be relevant to them. If that’s the case, you could try to keep them on board via social media and encourage them to act as brand ambassadors.
7. Demonstrate your brand values
Modern customers are increasingly aware of how their buying power can influence companies’ behaviour. They reward brands they identify as showing values they endorse and punish those that don’t. This means you need to be clear on what your brand values are. And, of course, you also need to be committed to demonstrating those values in everything that the business does.
Bonus tip - Keep improving everything you do
This tip is a bonus because it isn’t specifically about attracting and keeping repeat customers. It’s about attracting and keeping all customers, including new ones. Anything you can do to improve your customer’s experience with you improves your relationship with them. That improves your chances of becoming and staying their preferred option and the one they recommend to their friends.
One of the great advantages of working with Square is that it gives you access to a whole ecosystem of tools and services you can use to improve your business. In addition to what Square offers itself, there are over 4000 partner integrations and more are being added all the time. From appointments to inventory management to paying staff and freelancers, Square can help make your business better for you and your customers.