Where do you spend the most of your time and resources in your business? Unfortunately, many firms invest the majority of their valuable resources on obtaining new consumers. While acquiring new customers might boost revenue and brand exposure, the benefits aren't as big as client retention.
Repeat clients are substantially more valuable to your company than new customers because they are more likely to bring in more earnings. According to studies, 20% of your repeat clients are responsible for over 80% of your future income!
As a result, businesses must begin concentrating more of their efforts on maintaining existing consumers, converting them into loyal customers, and boosting their lifetime business value.
Before we get into the profitability of repeat customers, it's crucial to understand what a repeat client is.
What does it mean to have repeat customers?
Customers that return to your business time and time again to make more purchases are known as repeat customers. A repeat customer is one who has made at least two purchases from your business.
Returning customers are sometimes referred to as recurring or loyal customers because they are loyal to your brand and are likely to buy from you again in the future. Repeat customers also become your finest brand ambassadors and bring you more business.
Why are repeat customers so valuable to your company?
The primary rule of any business is to keep clients and create a loyal relationship with them in order to avoid paying for new customers. Repeat customers not only convert more frequently, but they also spend more money on average than first-time purchases. This suggests that your loyal clients are purchasing more and more frequently from your store.
Taking care of your repeat customers and providing them with excellent service can significantly boost your company's earnings. Here are some of the reasons for this:
Increased likelihood of making a subsequent purchase
A repeat consumer has already purchased from your company on several occasions. Such customers are already familiar with your brand, enjoy your services, and have a positive attitude toward your business.
As a result, selling your products and services to recurring consumers is easier than selling to new ones. You can create more sales with the same amount of resources if you use repeat customers.
Customers who return are less expensive.
It can be significantly more expensive to acquire new clients for your business by promoting your items than it is to sell your products to repeat customers. This is for obvious reasons, such as the fact that repeat clients are already familiar with your brand and prefer your items to those offered by competitors.
Customers who return have a higher lifetime value (LTV)
Aside from greater conversion rates, recurring customers' average order value is also larger than that of new customers. A repeat client will spend more money on each transaction than a new customer, either through upsells or higher order quantities.
Furthermore, a repeat consumer is more likely to make regular purchases from your brand than a new customer. As a result, pushing new products to recurring consumers requires far less work than promoting new products to new customers.
New customers are more likely to be referred to you.
Because they have had positive encounters with you, your repeat consumers are loyal to your brand. As a result, repeat clients are more likely to spread the word about your business through word of mouth or social media. As a result, your repeat customers have the extra benefit of referring a large number of new clients to your company.