Returning customers are a mainstay of every successful business for the simple reason that they are key to continued profitability. But whenever competition heats up, businesses can struggle to build a customer base and keep them coming back. Learning how to get customers to return is of vital importance, especially for small businesses.
Taking a few fundamental steps can make the difference in winning the "customer battle."
What is a repeat customer vs. a returning customer?
A repeat customer is someone who returns to your business and repeatedly buys your product or service. People who shop at a neighborhood bakery, for example, often come back as the impulse to buy pastries or other goodies strikes them.
A return customer is simply someone who has bought your product or service once before and has returned to make another purchase. It is the goal of any business to turn first-time customers into returning customers. But the real prize is converting returning customers into repeat customers — the most loyal and dependable segment of your customer base.
The importance of repeat customers
There's great value in repeat customers. Among the benefits:
- They're free promotion for your business. Often, these customers can help spread the word about a favorite business to family and friends. This word-of-mouth approach (which you as the business owner can encourage with repeat customers) is often highly effective marketing for your business.
- Getting repeat customers is cheaper than acquiring new customers. Having a customer return to your business is less expensive than the costly and often time-consuming process of gaining new customers. Little to no additional marketing is generally required to attract a repeat customer back, as opposed to starting from scratch with people who know nothing about your company.
- You can use them to test out new products or services. A repeat customer is often open to a new product launch or design updates that make an existing product or service more effective and customer-friendly. They already know your business offering, and an appeal to "give our newest product a try" is frequently met with enthusiastic participation.
7 ways to attract returning customers
Clearly, the importance of repeat customers can't be overstated. Over time, they can become a steady, reliable element in a business's overall marketing and sales strategy, as long as the business makes keeping repeat and return customers a priority.
Here are some ways to encourage customers to return:
1. Make customer service a priority
Some businesses merely talk about the importance of customer service, while others make occasional efforts to refine the way they interact with their target audiences.
On the other hand, many successful businesses focus on aligning operations to revolve around customer needs. These businesses:
- Outline specific customer service principles in their mission statement and employee handbook.
- Establish internal systems that support front-line employees to deal with virtually any type of customer service interaction (often empowering employees to make on-the-spot decisions rather than passing along customer inquiries and complaints elsewhere).
- Measure the results of customer service strategies and reward employees who excel in this area.
- Encourage repeat customers to post reviews of their business on Yelp and their favorite social media platforms.
Quality customer service is often perceived as a hit-or-miss proposition, so customers will likely notice and wholeheartedly support this type of commitment.
2. Incentivize returning customers with loyalty programs for small businesses
Figuring out how to get customers to return can be especially challenging for small businesses, which can't draw upon the same resources as larger operations. Entrepreneurs must use their ingenuity to make up that difference. And customer loyalty programs for small businesses are a great place to start. Here are three types of loyalty programs you may want to consider implementing:
Although low-tech, punch cards can be a cost-effective way for launching a customer loyalty program for small businesses. This approach may be useful for businesses new to the rewards game, and it is a great way to determine whether customers are willing to engage with a loyalty program. There are a few drawbacks to this approach, including the inability to collect demographic information. Also, these programs rely on customers remembering to carry their cards, which does not always happen.
Electronic membership cards
This approach enables business owners to collect customer data, which can then be used to create targeted email campaigns and determine what regular customers purchase the most. Also, since electronic cards are connected to a computerized system, customers may be able to provide their phone number or email address to access savings rather than having to display a physical card. While more convenient and useful than a punch card system, electronic membership card programs can be more expensive to maintain because of the necessary IT infrastructure.
Loyalty apps for small businesses
In an era where a large percentage of business is conducted online, the capacity of a mobile app to build loyalty is almost limitless. That's because:
- Customized apps cut marketing expenses by maintaining contact through emails, texts, and (when appropriate) push notifications.
- Apps can be permanently visible (in the form of a business logo icon) on a customer's mobile device, thus reinforcing awareness of the brand.
- Businesses can reward customers who make steady use of the apps through special rewards, discount offers, and other perks. This, too, can build repeat sales.
Indeed, loyalty apps for small businesses — among all types of loyalty programs — have great potential to be a key component in your strategy to get customers to return.
3. Highlight positive customer experiences
Customers sometimes need to be politely reminded that your business exists. You can distribute an email newsletter that highlights customer satisfaction news and features. Or you can interview loyal customers and feature them on your website, in your newsletter, and in other promotional materials.
Taking a personalized approach is another useful strategy. Some business owners commit to replying to every customer email and call they receive. A brief, personalized response (even when no specific business issue or concern is involved) can speak volumes about the value you place on staying in touch with both customers and the people in your professional network.
Another approach involves use of an automated thank-you message that appears with every product fulfillment or in a separate, follow-up email. (Be careful to word this message in a way that avoids coming off as generic or insincere.)
4. Vary product offerings to keep customers' experience new and fresh
The risk with valuable return customers is they may eventually tire of purchasing the same things time and again. If you find ways to vary your products or services, it could spark renewed customer interest.
Consider ways to offer a slightly different experience from the normal transaction. It's a great way to pleasantly surprise your loyal customers and keep their interest piqued for future purchases.
5. Share helpful insights via social media
These days, an array of apps and social media profiles enable business owners to communicate directly with their customers. Look for ways to share helpful how-to articles and videos you come across (particularly as they relate to the use of your products or services).
Sharing content — generated by your business or reposted from elsewhere — can build goodwill among customers with specific issues or problems. By avoiding any pushy sales message, you can once again reinforce customer loyalty through these actions.
6. Never ignore customer complaints
Yes, customers sometimes complain about what may seem like relatively minor issues, but remember, they're important to the people involved.
If you're concerned about the time spent responding to every complaint, consider the following: It can take years to build customer trust, but only a matter of seconds to tear it down (especially through social media, where countless other prospective customers can get word of a single individual's bad feelings toward a business). By responding immediately to negative reviews or complaints, you can keep them from spreading elsewhere — and you may win back your customers more quickly.
7. Survey your repeat customers
Just as business owners may not know all the reasons why customers leave, they also may not fully comprehend why someone chooses to be a repeat or returning customer. Consider distributing a quick, easy-to-complete survey to these valued customers, seeking details on why they come back, what they like about your business, what areas might be worth improving, and any other thoughts they might have. Be sure the format you choose for the survey (email, website, social media) makes it convenient for them to respond. (Offering a discount on their next purchase could be a good incentive to do so.)
When customer feedback results in actionable steps you can take to improve service, implement these strategies and let customers know that you're acting on their input.
Every loyal customer your business has once started out as a new customer. Making each new customer's first interaction with your business pleasant and helpful is a great way to begin a new relationship. Proactively reaching out to these people afterward can greatly increase the odds that they'll become loyal returning customers.