So you have spent time creating your online store. You picked a killer brand name and logo. You’ve taken beautiful pictures of your products and displayed them catalogue-style. You even offer free shipping and have a media campaign to entice new customers. These are all great! Awesome even! But they are only a start.
You need to focus not only on attracting new customers but on keeping the ones you already have. Because repeat customers tend to spend more money over time, offer more customer referrals and word-of-mouth recommendations, make fewer demands, and can even lower your business costs because they’re cheaper than acquiring new customers. Repeat customers are everything to your business because they are extremely profitable. Here are 4 additional reasons why:
A repeat customer is more likely to shop at your store again and again.
Usually, a repeat customer is defined as someone who has made a purchase from your store more than twice.
Studies have shown that the more a customer buys from your store, the higher the probability that they buy again except they have a bad experience with one of the purchases. On average, a customer has a 27% chance of making a next purchase after the first purchase, 45% after the second purchase, and 54% after the third purchase! It consistently gets higher.
Repeat customers spend more at key times.
This comes off as a shock to most people but reports have shown that during holidays and low economic growth periods, stores rely on the customers who have bought from them before for most of their revenue as new customers are harder to acquire at such times.
Most stores make the bulk of their revenue during Easter periods, August — October, and Christmas. According to Adobe, the average shopper spends 17% more during the holiday rush. While this is great news, it is worth considering that your repeat customers spend 25% more per transaction during these holiday periods.
Repeat customers are easier to sell to!
According to e-commerce industry standards , when you market your store on social media, only 3% of people who see your link actually click on it. This is called conversion rate. However according to marketing metrics a repeat customer has up to 60–70% chance of clicking and converting!
Therefore the more repeat customers you market to, the more your marketing makes sense because they are more likely to convert.
Repeat customers tell others about your store
Paid marketing is okay. However, word of mouth referrals is always the best as they are more trusted and make a lasting impression on prospective customers.
A satisfied repeat customer will be your store evangelist even when they don’t realize it. People like to say what they did and have others do it too. The number of people a repeat customer refers your store is directly proportional to the number of times they have bought from your store. Meaning the more they buy, the more they refer new customers to you.
In this research conducted by Bain and Company, they found out that after the first 10 purchases, a repeat customer refers 50% more customers than a first-time buyer. This is immense!
The more repeat customers buy from you the more they refer other customers to you
In general, repeat customers tend to spend more money over time on your store, tell more people about your store, make fewer demands, and are cheaper to sell to.
To build a large customer base on your store, customer retention is critical. It is worth noting that for a customer to turn into a repeat customer, customer service and satisfaction has to be of the highest quality. There is a higher version of this called Customer Happiness. And in our next post, we’ll be talking about it — how to turn your customers into happy repeat customers.