Repeat Customer | 6 mins read

5 Ways to Gain Loyal Repeat Customers

5 ways to gain loyal repeat customers
Chloe Henderson

By Chloe Henderson

What is a Repeat Customer?

A repeat customer is a loyal shopper that continuously returns to a business to make purchases. While people often use the term repeat customer synonymously with return customer, they have distinct differences. A return customer is a consumer that returns to a retailer a second time after making their initial purchase.

Retailers rely on repeat customers to sustain their businesses, as it is not feasible to consistently pull new consumers. Companies that prioritize customer retention can unlock various benefits, including the following.

Drive Sales and Revenue

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Repeat customers are easier for businesses to sell to and have higher conversion rates. One study found that repeat customers spend up to 300% more than new customers. Another study found that 60%-70% of repeat customers convert, compared to the average conversion range of 1%-3%. By continuously increasing the average order value (AOV), companies can also improve the average customer's lifetime value.

In other words, businesses that have high customer retention spend less time and money trying to drive revenue. Instead, they just have to maintain the trust they already established with loyal shoppers. This gives retailers more time to invest in expansion and customer acquisition efforts.

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Save Acquisition Costs

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Customer acquisition can cost a company up to five times more than customer retention efforts. While this may not be a huge difference for major corporations, small businesses need to save money anywhere they can. Then, trying to increase new customers' spending habits to repeat customers' level can cost up to 16 times more. By focusing first on customer retention, retailers can slowly work on customer acquisition without inflating expenses.

Promote Customer Advocacy

Everyone knows that word-of-mouth advertisements are one of the best marketing forms, as it is personable and unbiased. In fact, studies show that after just 10 purchases, a repeat customer is 50% more likely to refer other consumers. This is not entirely shocking as customers prefer to hear reviews from other customers rather than traditional marketing promotions. This means that organizations that foster retention can spread brand awareness at no cost.

In addition to word-of-mouth advertisement, companies can encourage loyal customers to share feedback and honest reviews online. This type of promotion is better than any advertisement a business can invest in. Therefore, retailers should foster brand advocates and even ambassadors to promote their company.

5 Ways to Increase Repeat Customers

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At this point, businesses recognize that improving customer retention is essential, but some may still not understand exactly how. Owners should review the five best customer retention practices to increase their repeat customers.

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1. Utilize Customer Accounts

Customer accounts can either be a major benefit or deterrent for consumers. On the one hand, shoppers that love a brand are more than willing to set up an account out of support. It also streamlines the user's repeat purchases by storing their personal and billing information.

On the other hand, some consumers feel that creating an account for businesses they patronize is a big commitment. This is especially true for first-time visitors who haven't had the chance to form their opinion on the product. These people will often choose to checkout as a guest so the company can't store their information.

The trick is making the account registration as easy and quick as possible. Instead, of prompting the customer to make an account before their transaction, retailers should wait until after the purchase. All of their information is already filled out, and all the user has to do is accept the invitation. This saves shoppers the extra time of refilling out each data field.

2. Improve Customer Service

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The overall customer experience is what ultimately determines whether or not a shopper will return to a business. Companies need to strike the right balance between letting the customer browse their products and assisting them along their journey. It is also important to remember that customer service doesn't end at the transaction but extends post-sale.

Many online retailers use live chat, help desk, and chatbot tools to answer customer questions. This way, businesses don't have to rely on limited staff to answer every inquiry. Typically, companies that can resolve or answer a customer's question can also convert them into repeat buyers.

Studies show that consumers also value service that is quick, consistent, and of quality. Unfortunately, many companies prioritize service speed and compromise their quality. Therefore, managers should find a balance of the two that is sustainable.

3. Launch a Customer Loyalty Program

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Repeat customers enjoy loyalty programs because they gain access to customized and exclusive promotions. Much like a customer account, loyalty programs require shoppers to enter their personal and billing information. This enables the business to track the customer's purchase activity, history, areas of interest, and dislikes. With this information, retailers can improve their target marketing and product recommendations to encourage repeat buys.

A successful loyalty program creates a symbiotic relationship between the customer and business. While the customer receives added value to their shopping journey, the company secures another repeat buyer. The key to getting consumers to sign up for a loyalty program is by offering some sort of initiative. While some retailers offer a one-time discount, others may offer free shipping or a gift.

4. Send Customer Emails

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Modern businesses, especially those that have loyalty programs, use email marketing to improve customer engagement. By keeping in constant contact with shoppers, retailers build a trusting relationship and retention. However, companies should be sure not to bombard subscribers with too many emails, as they may unsubscribe as a result.

Aside from marketing, customer emails are great for numerous alerts, including-

  • Reminding customers of their abandoned shopping cart
  • Giving personalized promotions
  • Alerting loyal shoppers of exclusive deals

5. Offer Discounts

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Some businesses go down a slippery slope with discounts. When customers receive a discount upon first meeting a business, they may continue to expect these low prices. This can be difficult for the typical company to withstand before losing profits. However, when done correctly, retailers can attract new customers and encourage repeat buys.

For example, some retailers send first-time buyers an exclusive discount for the item they just bought. This generates a repeat purchase and gives the shopper a chance to browse similar products. Other organizations offer store credit, such as $10, so shoppers can use it towards their favorite product.

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