How do you not only attract new customers to your business but then turn them into repeat customers that keep sending money your way?

In this article, we’ll cover:

• The benefits of having repeat customers in your business.
• How to calculate your repeat customer rate.
• 15 tips for acquiring and retaining customers.

Let’s get started.

What is a repeat customer?

Repeat customers are people who buy from you time and time again. As these individuals continue to do business with you, they can become your most loyal customers, with higher customer lifetime values and levels of satisfaction.

Repeat customers vs returning customers vs recurring customers

Repeat customers, returning customers and recurring customers are all similar, with slight differences.

You can define a repeat customer as someone who returns to your business repeatedly and buys your product or service.

Return customers are those who have bought your product once and are returning to make another purchase. Every business strives to convert first-time customers into return customers. However, the real prize is to convert returning customers into repeat customers – your most loyal and reliable customers.

Recurring customers are those who purchase your products and services regularly – usually on a subscription basis.

Why is it important to have repeat customers?

Repeat customers are important for five main reasons:

It’s easier to up-sell and cross-sell to repeat customers

You can encourage repeat customers to purchase add-ons or complimentary products. Repeat customers convert at a higher rate with up-sells and cross-sell since they already trust the quality of your products and recognize their value.

Retaining existing customers is cheaper than acquisition

Marketing and sales are expensive. It’s pricey to attract new customers since customer acquisition tools like ads and sales outreach cost a pretty penny. On the other hand, it’s cheaper to retain an existing customer since you don’t have to use expensive marketing and sales resources.

Repeat customers have a greater lifetime value

Repeat customers spend more money so they have a greater lifetime value. They know and trust you so they’re easier to sell to and they make repeat or recurring purchases for a longer period.

Repeat customers result in word-of-mouth referrals

People love to talk about products or services that have made an impact on their life – either positive or negative. Give a positive customer experience to anyone who interacts with your business. You’ll be more likely to not only get more repeat customers but also customer advocates who sing your praises to their network with word-of-mouth marketing.

You can use them to test beta products

Give your repeat customers the VIP experience by having them test beta products. They’ll love the exclusive access, and you’ll get reliable feedback from a group of people who already understand and value your business.

How to calculate repeat customer rate

Calculating your repeat customer rate is easy. Just take the number of customers who’ve made at least two purchases, then divide them by your total number of customers. To get an easy-to-read percentage, multiply it by 100.

Here’s the formula:

Repeat customer rate = [Number of customers who’ve made at least two purchases/ Total customers] x 100

Aim for a score of at least 20%.

15 tips for acquiring and keeping repeat customers

Is your repeat customer score too low? Here are 15 ways to boost repeat business:

Retain existing customers with secondary onboarding

Onboarding isn’t only for new users, especially if your goal is to turn your existing users into repeat customers and power users.

You should implement secondary and tertiary onboarding throughout the user journey. This will introduce users to secondary or advanced features to drive repeated and continuous value.

Provide outstanding customer service

Customer service can make or break your relationship with existing customers. Even just one bad experience can have them packing their bags to go try out a competitor.

On the other hand, good customer service will boost customer satisfaction, increasing customer retention.

Nowadays, products from competitors can be quite similar and less cutting-edge, so the customer experience is what makes all the difference.

Level up your customer service with a self-serve resource center. This is a knowledge base of content that will answer customer questions on demand, usually with a mix of video tutorials, case studies, and help articles.

It’s a frictionless experience for the customer since they can instantly get an answer to their question and keep engaging with your product right away.

Empower your customers with product education

Product education trains your customers on how to get the maximum value from your product. High value contributes to better customer retention.

Offer high-quality video tutorials and demonstrations so that your customer gets highly accustomed to your products.

Collect user feedback and act on it

Working on customer feedback shows that you care about your customers, and you’re a customer-first company.

There are different ways of collecting feedback. You can do email surveys, collect reviews, analyze live chat discussions, or monitor social media.

The best way to collect user feedback at scale is to build in-app surveys. It’s good for two reasons:

• The product experience is still fresh in users’ minds when completing the survey, so answers are the most accurate.
• You can trigger different surveys for different user segments, so you’re getting the most relevant feedback.

After collecting feedback through surveys, analyze your customer data to find helpful insights, patterns, or common requests.

Then, act on that feedback by making product improvements. Close the feedback loop by notifying customers of the changes you made based on their feedback.

Unite customers around a shared mission

A shared mission or shared values bonds customers to brands and boost customer morale. Being vocal about your mission will create a community of like-minded people around you.

As a bonus, repeat customers promote brands that cater to causes that are meaningful to them, so you’ll likely boost your word-of-mouth marketing by uniting customers around a shared mission.

Monitor in-app user behavior and make data-informed decisions

Observe how users are engaging with your app, including their buying trends.

Set in-app goals and create custom events within it to monitor where users drop off. Then, you can segment users who got stuck in a specific stage of the user journey and offer them help.

You can trigger surveys to understand what’s stopping them, offer in-app guidance, or have your customer service teams reach out to offer 1-on-1 help.

Get more repeat customers with loyalty programs

One of the best ways to turn new customers into repeat customers is to implement a loyalty program.

By rewarding loyalty and incoming referrals, you encourage customers to stick to your brand and promote it to their network. Not only is this beneficial for new customer acquisition, but your existing customers will also feel more motivated to keep purchasing from you.

In this example from Evernote, they use a points-based referral program that rewards customers with money off their plan when they bring in new customers.

Offer discounts and incentives to loyal customers

Show your appreciation and thank loyal customers for sticking with you, while encouraging them to keep making repeat purchases from you with discounts.

Discounting all the time is not sustainable, but rewarding your most loyal customers with the occasional incentive keeps them happy.

Use modals to send personalized messages to customers and send them rewards.

Announce new features and drive repeated value

As SaaS companies evolve, they launch new features or improve the existing ones to deliver more value.

But, if users don’t discover them, they’ll never experience the value. They won’t use your app to its fullest potential. and will be at risk of switching to a competitor if they think they can get better value elsewhere.

There’s a high chance that users won’t see the new features because of feature blindness, where they stick to their product usage habits and don’t even notice other features that fall outside of their regular use.

To combat feature blindness, announce new or under-used features to customers using in-app modals or tooltips. This will boost software adoption and convert more customers into repeat customers.

Take measures to prevent involuntary churn

Involuntary churn happens when a customer’s account cancels because of a recurring payment failure.

It’s unfortunate, but inevitable with subscription businesses that automatically charge for renewals. Involuntary churn happens because of:

• Expired cards
• Lost/stolen cards that have been canceled
• Insufficient funds
• Wrong billing information

A returning customer could have every intention to renew their subscription, but their purchase doesn’t go through for any of the reasons listed above.

The best way to prevent involuntary churn is to offer a grace period for payment failures, and then couple that with a website notification banner that encourages the customer to fix their billing issue.

That way, they get a few days or weeks to resolve the issue and continue using your product or service without disruption.

Create a memorable customer experience with gamification

Users tend to remember experiences that make them feel good.

Take a look at this example from Asana, where they use a flying unicorn to celebrate completing a task. It motivates their users to keep crushing their tasks.

You can create a similarly memorable customer experience by using the power of gamification. Elements like, progress bars, fun characters or animations, badges, and certificates keep motivation high. It’s a great way to engage repeat customers and keep them coming back for more.

Use email to stay on top of your customer’s mind

Email marketing is an effective way to stay on your customer’s radar and improve customer retention.

Use email to:

• Send monthly newsletters
• Share industry news and other helpful content
• Send subscription renewal reminders
• Announce new features
• Re-engage inactive users and bring them back to the app

Build virtual communities for your customers

Virtual communities for your customers are places where they can talk to each about their experiences running their businesses, share their problems, give advice, and network with like-minded people.

It’s also a great way to have customers feel closer to your business, building that connection with your business and with each other.

Build a virtual community by creating an exclusive Facebook group or a private Slack channel for your customers. Nurture the community with regular polls, Q&As, AMAs, and other interactive content.

Turn detractors into promoters to retain more customers

Identify and reach out to customers who are at risk of churning and proactively get them to change their minds about your product’s value.

To do this, create user segments of customers who are at risk of churn including inactive customers, and customers who scored low in the NPS survey.

When running an NPS survey, you can tag and analyze the responses of your unhappy customers, and then reach out to address their concerns.

Send them a personalized message and offer your help to avoid losing them.

Offer alternatives to churning customers

When customers request to cancel their account, trigger microsurveys during the cancellation flow and offer alternatives customized to their specific answer.

For example, if they’re canceling due to a budget issue, you can offer them a discounted rate for the next 3 months, or give them the option to pause their account for a few months.

It’s not too late when users intend to cancel. You can still make some last attempts to retain them without making their cancellation experience difficult or unpleasant.

If they do choose to leave, make sure they leave with a positive impression of their experience so there’s still a chance of them returning someday.

Conclusion

Repeat customers are the dream of any business. They spend more money, are easier to retain, and often become customer advocates thus drawing in new customers to your business.

Invest in a customer retention strategy with interactive product experiences to get more repeat customers that boost revenue.

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