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How To Turn First-Time Buyers Into Repeat Customers

Updated 01/25/2021
How to improve customer retention

There's no doubt that attracting new customers is essential for your small business. Turning those first-time buyers into repeat customers is arguably just as important.

Loyal customers are a cornerstone of a successful business. This is true for both mom and pop shops and massive corporations. The more a customer returns to your business, the more you can expect your "customer lifetime value" to increase. Customer lifetime value (CLV) measures the average revenue that a business can expect to earn from a client over their entire relationship. As can be imagined, building customer retention generally increases this value.

Here are a few more reasons repeat customers and customer retention are key to a successful business:

  • It's much cheaper to keep an existing customer than to find a new one. Finding new clients can be expensive and use valuable resources. Keeping a customer happy, and therefore guaranteeing their future business, is much cheaper. In fact, one survey by Invesp found that acquiring a new client cost five times as much as retaining an existing one!
  • Repeat customers spend more. Once a customer has bought from you and has had a good experience, a level of trust has been established. The next time a customer goes to make a purchase, they're more likely to spend their money with someone they trust rather than risk the unknown. In fact, the chances of them buying from you again are 60-70%, as compared to 5-20% for an unknown seller. Your loyal customers are also more likely to buy larger ticket items from you because they are already confident about spending money with you.
  • Marketing costs are lower. It's easier to market products and promotions to existing customers. You already have their email address (more on that later) and they know and trust you. It's the opposite of a cold call—it's a trusted contact informing them of a deal that they'll hopefully be interested in.
  • Happy customers spread the word to their friends. Word of mouth has always been one of the best methods of advertising. Happy, loyal customers are your best marketers. People believe their friends when they endorse a product or service, so by keeping your customers delighted you're doing powerful organic marketing.

How To Turn First Time Buyers Into Loyal Repeat Customers

Earning repeat customers.

Now that we've looked at why customer loyalty is so vital to your small business, how do we achieve it? The following are our top strategies to make sure that once a customer finds you and your brand, they'll keep coming back for more.

Perfect Your Packaging

Believe it or not, your product packaging can be an effective way to boost customer retention. In another article, we explained all about how to optimize your packaging to encourage repeat business. Include your contact information and social media details, promote your brand and other offerings, and encourage your happy customers to share their satisfaction by leaving a review.

Slide Into Their Inbox

When a customer buys from you, especially if it's an online purchase, make sure to invite them to join your email list. Email lists have the best sales conversion rates of all marketing channels for small businesses, generating $38 for every $1 spent, an astounding 3,800% ROI!

Once you have a customer's email address, you can keep them up-to-date with sales and promotions, introduce them to other products or services, and increase their brand loyalty by offering email list subscribers exclusive discounts.

Create A Subscription Box Service

One powerful way to ensure repeat business is the subscription box. We've written a whole guide on how to create a subscription box business here. The idea is simple — your goods are delivered to customers at scheduled intervals, which generates recurring income and guarantees return customers.

Insert Some Extra (Free) Publicity

Optimize packaging for return customers.

Package inserts (a personal favorite of ours) represent an awesome opportunity to boost your customer loyalty and sales. We've covered the full benefits of package inserts in another post, including what you might include on this bonus piece of marketing material. You can say thanks to your clients, promote other products, or boost your social media following. Use your imagination!

Take Advantage Of Texts

As mentioned above, following up with new customers via email is an excellent way to increase brand loyalty. You won't always have access to a customer's email address, but if you have their phone number you can use the same strategy with texts (also known as SMS marketing). SMS is shown to have a whopping 45% conversion rate and up to a 98% open rate, compared to an average 3% conversion rate and 20% open rate via email.

When you have a customer in front of you, ask them if they'd like to opt-in to your text message notifications (adding a little incentive always helps, such as a discount on their next purchase). If you use Square, they make it super easy for small business owners to set up a messaging list, and they give you the option of including a ‘text message marketing enrollment' button which appears to each customer as they make their purchase.

Invite Clients To Leave Reviews

Leaving reviews.

Ask your clients for constructive feedback. Actively seek out their opinion, rather than waiting for them to leave a not-so-positive review. This will make them realize that you truly value their insight, and it also gives you the opportunity for market research.

Never Miss An Opportunity To Engage With Your Customer Base

Whatever methods you use to increase your repeat customer base, remember to engage with your clients and make them feel valued. Once a new customer makes a purchase, nurture them and show them that you truly value their business. Your small business depends on your customer base, and the better the relationship you have with them, the more they'll engage with your business and become your biggest fans.

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