Why do these names seem so familiar? Feels like you have come upon them a couple of times. We will give you a hint: these are your repeat customers knocking on your door again. Yes, exactly those ones who bring the most revenue to you business, those who trust your company most than any other, those who build up you brand, talk about you to their neighbors or colleagues, and those who are tied with you with a trust.
Repeat sales are your key to successful business. Let's have a look on what wonders your existing customers can do for you.
1. Repeat sales bring more profit
The recent Adobe e-commerce study reveals that your repeat customers spend up to 397% more than newcomers. That's why you should constantly search for new ideas about products that can be purchased by existing customers. Every time your customer returns, the chances to get him back are getting higher. Your repeat customers are not only easier to convert, but their order value is also higher than the one of a first buyer.
What's more, repeat customers are less price sensitive. The tiny drop of price can make the first time buyers switch from one company to the other. In case of existing customers, once they get positive experience with you, the price change will not be such a big issue for them.
You can check our previous post to learn how to calculate the potential profit from your repeat sales.
Some of the ways to increase repeat sales include giving discounts to your full time buyers, introducing loyalty programs or improving the customer support.
Here Forbes gives some advice on how to make more sales with repeat customers.
2. Repeat sales involve less costs
No doubt you want to expand your market, but the experience clearly shows: it is not only easier to make past customers purchase, but also less costly. Bringing new buyers to your business can be up to 10 times more expensive than relying on repeat purchase of existing customers. As a result, repeat sales reduce your marketing spend.
Repeat sales are also not as time consuming as involving new customers. You need time to convince new people to buy your product, meanwhile it is easier to persuade your existing customers to make a repeat purchase.
Great example of getting more repeat sales with less costs is Inkbox, permanent tattoo company. Within a couple of months after launching a reward program, their repeat sales raised up to 80%.
3. Repeat sales build up your brand
Repeat customers are literally the foundations for your successful business. And not only because of the profit they bring, but because they build up your brand. Prosperous companies are working hard on returning customers and measuring their performance by tracking brand loyalty statistics. For examples, Amazon carries out such things as free shipping on orders of $25 or more, which makes spend more money or repeat purchase.
The study of McKinsey reveals that word of mouth is one of the primary factors of all purchase related decisions. Your repeat customers are building up your brand by recommending your product or service to their friends, family, colleagues. More than 90%, according to Nielsen, trust these recommendations, so, as a result, with every successful repeat sale you have higher chances to acquire new customers. This is why you should give an excellent customer service to your buyers to make your repeat sales grow. This is why you should give excellent customer service to your buyers to make your repeat sales grow.
Also introducing a referral system can make it easier for your existing customers to build up your brand. Reward both your existing customers and people they refer your product to. This is a game where everybody wins. You will never find better advocates of your business than your repeat customers.
4. Repeat sales increase customers loyalty
Repeat sales are always leading to building and increasing customers loyalty. That's why successful companies are starting loyalty programs to drive repeat business. For example, Starbucks Rewards loyalty program helped them reach the dominative position in coffee market.
One of the ways to increase repeat purchase and build up customers loyalty is the integrated relationship. This the guarantee of repeat sales, as the customers have to use the product again, whether they want it or not.
FedEx is a great example of using integrated relationship with the customer. The company installs computer terminals in businesses of their clients. It helps to define shipping requirements for the business and follow the shipments of goods. The integration is made even into the inventory, accounting and other components of management system of a customer's business. In such a way FedEx almost automated the repeat purchases.
5. Repeat sales bring better feedback
Nothing can make you understand your business better than your customers: both those who are leaving and those who are coming to buy more. Repeat sales help you understand your target market. You can get all the valuable information straight from your repeat customers. Who else will tell you that the package of a product got better and more personal, or that the delivery started to get slower, if not your repeat customers?
"The packaging of a product became so much better"!
"The delivery time is getting faster".
"These guys are not as excellent as they were anymore".
Yes, exactly repeat sales of your existing customers, and their feedback is something that keeps you in a good shape (only if you take into consideration their feedback, of course). Bad customer feedback is not negative feedback. This is a chance to look deeper into the potential problems of your product, and to do your best for its improvement. Here are some tips for you to improve customer feedback and drive more repeat sales.
One of the effective ways to get better feedback from your repeat customers is to engage your customers and make them feel they make a difference to your product. Kissmetrics are doing great job with educating their existing customers with the appealing blogs in the particular areas of marketing.
When it comes to eCommerce many customers abandon their carts in a middle of a checkout. Having a cart abandonment strategy can increase your sales up to 25%, based on BigCommerce blog.
Now that you see the importance of repeat sales for your business, you can dedicate more resources to make it grow. So keep your door open to the brand-new customers, but make sure the existing clients never want to close that door from outside. To get out more of your eCommerce store checkout Guide to Ecommerce Platforms for even more actionable tactics.
Would you like to increase your repeat purchases using customer segmentation? You can try a tool that will help you do that - sign up for a free account here.