Repeat Business = Profitability

It’s an age-old question. Should you focus your marketing budget and efforts on gaining new clients? Or is it more important to retain the customers you already have?

While the short answer is that you should be focusing on both, the stats reveal that retaining existing customers is what makes your business more profitable. It can cost 6-8 times more to gain a new customer than it does to sell to an existing customer. So, it is worth your time and effort to try and keep your repeat customers around.

Obviously, you need new customers so that they can become repeat customers, but if you are spending all your time, money and effort on gaining new clients, you are missing out on the opportunity and profit of repeat customers.

Getting existing customers to come back does not only increase your profitability through repeat sales, they are also likely to spend more on each purchase. You can create a loyal base that may even tell their friends. For more on creating raving fans of your business, check out the blog on 'Creating Raving Fans' out.

But, you can’t just sit back and hope that your customers return. Relying on your customer service skills alone may not be enough to get them coming back again and again. You have to go out and actively market to these customers.

Keep your customers coming back and the business getting more profitable with these key ideas:

1. Build a Database

How are you going to market to your existing customers? You need a database. This does not have to be a complicated program, but you do need to have some basic data on your customers stored somewhere.

Thankfully the modern age of social media and email marketing mean you probably already have a database of some kind you can access. If you don’t already have an email list or a social media page you can market to, create something. Your database can become your biggest asset, so plan it out and communicate with those in your database regularly.

Even new customers can be added to your database and treated the same as regular customers, allowing for more repeat business.

2. Communication

Once you have a database, it is important to communicate to them regularly. This communication should be as personal and reflect your company culture and personality. Plan out what you want to send and even create special offers and invitation for your customers to come back and purchase again. Just be wary of giving too many discounts as your customers may come to expect it and not purchase unless they receive a discount.

3. Customer Service

Don’t forget about good old fashioned customer service. Make it easy for your customers to purchase from you again and make sure you deliver on your promises. Remember to “under-promise and over-deliver” and delight your customers into coming back to your business again.

4. What’s Next

Your repeat customers are not always going to come back for the same product or service over and over again. Make sure you have some next steps type offer available for them. Keep adding new, but complimentary, products and services to keep your customers interested.

You may even be able to incorporate a “Buy Forever” program. Something that your customers can sign up to today and continue to purchase, like a monthly subscription.

Keep allowing your customer to level up, purchasing the next level of product or service.

5. Test and Refine

As with every system, it is important to test things out to see what works. Look at your numbers and try different things to find the best options for your business. Tweak your changes or programs, always keeping your customer in focus.

If you are looking to increase your profitability, take a look at your repeat customers. Focus on customer retention and stay connected with your customers. People are willing to stay with companies, and even spend a little more, when they feel valued and get the service they expected.