Do you know how to go about building a strong repeat customer base? Are you aware of how valuable repeat customers are to your e-commerce business? Would you like to get some ideas about how to keep customers coming back again and again?
Here are some tips that will help show you the best ways to build a strong, healthy repeat customer base for your online home business.
Having a solid base of repeat customers is extremely valuable and can help ensure the success of your online business.
What Are Repeat Customers
Repeat customers are those who buy from you once, then come back ⎯ perhaps many times ⎯ and buy from you again. They will help keep your online home business profitable even through lean times.
If you need to tighten your business belt and are cutting back on advertising and promotional expenses, your repeat customers can help keep money flowing until things improve.
Repeat Customers Save You Money
Money-wise, it costs an average of about eight times less to get a sale from a repeat customer than from a new one.
While new customers are the lifeblood of your business, repeat customers are golden because they require far less effort and money in marketing.
Repeat customers are less likely to be problem customers because they come to you with confidence and trust established during a previous transaction.
Identifying Likely Repeat Customers
To start building a strong, solid repeat customer base, try to identify the customers who are likely to come back and buy from you again.
If you are an eBay seller, check the buying history and feedback of a customer to see if he or she habitually buys products in your niche. If you have your own website or online store, look at the nature of what was purchased. Is it an item that the customer is likely to buy again?
Keep track of the customers you deem likely to become repeat buyers. Make notes about the purchase and any other pertinent info that might help you with tailoring a marketing email or offer to customers you hope to bring back for more sales.
For example, if a customer buys a dog collar from you, chances are that this same customer will need other pet-related items, such as beds, leashes, harnesses, toys and more. Armed with this information, you can target an offer to that customer.
Don't Underestimate Word Of Mouth
Repeat customers make wonderful brand evangelists and can spread the good word about your online business to friends, coworkers, relatives…everyone within their sphere of influence.
The ripple effect means that repeat customers, by telling others about you, also expand your sphere of influence, and the circle just keeps getting bigger and bigger, which means more sales for you as time goes on.
Make it worthwhile to your customers to refer others to you. Offer incentives, such as free shipping or a dollars-off promotion.
Know The Lifetime Value of a Customer
Calculating the lifetime value of a customer is a simple formula that will help you recognize just how valuable gaining repeat business really is. Figure out roughly how much it cost you to acquire that customer. Calculate about how many more purchases the customer is likely to make from you over a period of years.
For example, if your niche is business supplies and a customer buys 10 reams of copy paper from you and then comes back a month later to buy 10 more, how many reams of paper are you likely to sell to this customer in a year? Five years? Ten years? This is how you figure the lifetime value of a customer.
Knowing the approximate lifetime value of a customer lets you see how cost-effective it would be to offer incentives and discounts to keep that customer coming back again and again.
If you would make $5,000 on a customer in a year, wouldn’t it be a good investment to offer free or half-price shipping or another attractive offer to ensure repeat business?
You can see how much repeat customers are worth in the long-term scheme of things and why you should have marketing and promotions geared solely toward those customers.
Market To New Customers
There is an old saying in the world of sales: Business goes where it is invited and stays where it is well-treated. This applies to customers. Market to get new customers, which is equivalent to inviting them to buy from you, and then treat them well to keep them coming back.
Customer service is one of your strongest weapons in the ongoing war with your competitors. Treat your customers well and you build loyalty that keeps them from straying to the competition.
Use Social Media Platforms
Try to make a connection with your customers. One of the best ways to do this is to have a business Facebook page and invite your customers to “Like” you on it.
With a business Facebook page, you can interact and connect much more easily than you could without social media.
You can also send emails to your customers who have opted-in to your email subscription list and target many of these emails to the particular customer.
For instance, if you have several customers who have bought hiking boots from you, sending an email newsletter announcing a new line or a sale is an excellent way to stay connected.
Remember, out of sight, out of mind. Don’t be a nuisance or bombard those on your email subscribers list with spam emails, but do stay in touch.
One great way to build a strong repeat customer base is to establish a loyalty program. This can be tremendously effective in making repeat customers out of those who otherwise might not have come back to buy more.
Your loyalty program doesn’t have to give away the store, but it should offer enough incentive to the customer to make buying from you again an attractive proposition.
Think of the businesses that give you a card and punch it with each purchase, with a free product after X number of punches. A loyalty program can work in a similar manner.
Offer your customers promotions and deals just for them as members of your loyalty program, so that they are rewarded for repeat purchases.
The Bottom Line
Never lose sight of driving traffic that brings in a fresh, steady supply of new customers, but work hard to make those newbies golden oldies who will come back to buy from you again and again.
Repeat customers are the best advertising you can get. It costs much less to get a repeat sale than to acquire a new customer. The lifetime value of a customer shows you just how much money their repeat business means for you. Treat customers well to get them to become repeat customers.