As a business owner, there’s nothing better than seeing the same faces in your store again and again. Whether it’s the construction worker that hits your drive-thru for his morning cup of coffee or the gardener that stocks up on plants and supplies at your greenhouse every season, repeat customers represent all that’s right with your business.
To these loyal customers, your business offers the products, service and support they’re looking for on a continued basis – and that’s something to be proud of.
While you appreciate these customers, as a business owner, you might not fully understand their importance. To showcase how vital these customers are, we’ll highlight five statistics that show their value and five statistics that show how businesses can lose repeat customers.
Repeat customers have a lot of clout in your business, and they’re worthy of your extra time and attention. Just look at these statistics:
1. Loyal customers heavily contribute to your bottom line
Sixty-one percent of small businesses surveyed report that more than half of their revenue comes from repeat customers, rather than new customers.
2. Loyal customers are easier to sell to
The probability of selling to an existing customer is somewhere between 60 to 70 percent, while the probability of selling to a new prospect is 5 to 20 percent.
3. Loyal customers will market for you
Satisfied repeat customers are very likely to recommend a brand, product or service to their family and friends. These satisfied customers could turn into brand advocates, who typically recommend nine products or brands to their inner circle every year. That’s free publicity, and powerful publicity at that. Studies show word of mouth advertising is the most credible with consumers.
4. Loyal customers are more willing to try new products and services
Ready to introduce a new product or service to your customers? Your repeat customers are 6x more likely to try it out.
5. Loyal customers are less price sensitive
A study from the University of South Australia found that longtime customers were half as sensitive to a change in price than a new customer. Of course, you want to be careful not to jack prices too high, but your repeat customers are willing to pay a little more for your product if it means sticking with your company.
Repeat customers aren’t locked into a contract. There’s no guarantee that they’ll stick with your business, so it’s important that owners understand what can drive them way. Here’s a look at the top five things that businesses do that sends a loyal customer packing:
6. Loyal customers will leave due to weak customer service
The number one reason customers leave a company is because of poor customer service. A study by Bain & Company corroborates this, saying a customer is 4x more likely to defect to a competitor if the problem is service-related, as opposed to price or product related.
7. Loyal customers will leave if they don’t feel appreciated
Sixty percent of customers stop dealing with a company because they think the salespeople or company are indifferent. They don’t feel appreciated, or even recognized for deciding to spend money with your company over another.
8. Loyal customers will leave if they don’t feel heard
Fifty-five percent of consumers said they are not likely to continue buying from a company that ignores their feedback. If a customer is willing to provide feedback, they expect the company to use it to make improvements not just file it away for later.
9. Loyal customers will shop less due to a difficult return process
How’s your return policy? If it’s a difficult process, or if you charge a customer a fee to return an item, you’ll likely have problems retaining them as a repeat customer. A study shows that customers who were charged a fee to return an item made 74 percent fewer purchases with that company.
Armed with the information above, small businesses can make efforts to not only keep repeat customers happy, but keep their buying potential high. Businesses that do work to reward repeat customers can keep them around for years to come.
How do you keep repeat business high? Share your thoughts in the comment section below.