5 Ways Repeat Customers are Better than New Customers
- October 1, 2021
- Posted by: Scale My Hustle
- Category: Customer Retention
When your business needs to increase revenue, where is the first place you look? If you’re like many businesses, you’re focusing the bulk of your time and budget on acquiring new customers. While new business is an important part of creating a profitable business, it’s probably not the best use of your time and money.
What if you spent more time focusing on your most valuable resource? Your existing customers. Concentrating on customer retention and encouraging repeat customers creates long-lasting profitable relationships.
Here are five reasons why you should focus your efforts on repeat business:
1. Repeat customers spend more money
300 percent more, according to RjMetrics.
Not only are your repeat customers purchasing more over time than new customers, they likely trust you enough to purchase your more expensive products or services.
2. Repeat customers are easier to sell to
You have limited time and resources; you don’t want to waste them on potential customers who never end up buying anything. Keep in mind, when you’re marketing to a prospective customer, you only have a 13 percent chance of persuading them to make a purchase. However, things change when you market to a repeat customer. Repeat customers have a sixty to seventy percent chance of buying.
Don’t waste time spinning your wheels without getting results.
3. New customers cost you more
If you’re a small business, you’ll need to save money anywhere you can. It costs five times more to acquire a new customer than it does to keep a current customer. Bringing that new customer to the spending level of your current customers costs 16 times more.
Spend your limited money where you know it will get the most impact.
4. Repeat customers promote your business
Marketing can be expensive. And hiring brand ambassadors? Nearly impossible for most small businesses. But what if your ambassadors didn’t cost you a penny? By focusing on repeat business, you’ll create a group of loyal customers that will happily say your praises and promote your business.
Repeat customers refer 50 percent more people than one-time buyers.
5. Businesses are built on customer retention
Your business shouldn’t be a revolving door for customers. By increasing customer retention by just five percent, a company’s profitability will increase by an average of 75 percent.
When you imagine future success, picture strengthening existing relationships rather than forging new ones. After all, 80 percent of future profits come from 20 percent of current customers.
Featured Image: istockphoto