How to Convert a New Customer into a Repeat Customer

by Suzanne Kearns on August 16, 2012
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Acquiring a new customer is six to seven times more costly than retaining an existing one, reports Flowtown, a company that specializes in small-business marketing strategies, tools, and tactics. Thus, it makes sense to spend a significant part of your marketing budget on drawing people back to your office, store, or website. But how do you do that?

Here are three tips for converting new customers into repeat customers.

  1. Provide stellar customer service. According to KISSmetrics, 71 percent of customers leave a business because they receive poor customer service. Knowing that, it’s important to ensure that new customers walk away believing that you have done everything possible to make them happy. Fonolo’s 2012 customer experience statistics show that customers feel better served when their concerns are answered quickly, and 86 percent of people say they are willing to pay more for good customer service. (Despite these findings, only 26 percent of companies have a plan in place to improve customer service.)
  2. Stay in touch. Ensuring that customers have a great experience when doing business with you isn’t always enough to keep them coming back. Make sure that your new customers know you care by following up with them after the sale, whether that’s simply checking in or informing them about a sale on a product that you know they routinely buy. For example, I recently took my dog to a different veterinarian, because I was short on time and her office was closer to mine than our usual vet’s. Three days later, one of her staff members called to check on my pooch. That simple gesture earned my future business.
  3. Rethink your customer-loyalty programs. How you present a special offer may directly impact how many people take you up on it. Social Triggers points to a customer-loyalty experiment using “artificial rewards.” In it, two sets of customers were given loyalty rewards that would earn them a free car wash after a certain number of paid car washes. One set of customers was given the opportunity to earn a free wash after eight paid washes; the other group was told that they needed 10 paid washes but would get the first two boxes on the card marked off for free. Both groups had to pay for eight washes before they received a free one, but the group that was given the “artificial reward” — or head start — of two “free” marks had an 82 percent increase in completion over the other group. The researchers say that this kind of offer only works when customers think there’s a legitimate reason for the reward, such as a “new customer bonus.”

Although a lot of marketing is geared toward bringing in new customers, converting new customers to repeat buyers seems to be a better investment. Take a look at your customer service, communications strategy, and rewards program (or lack thereof), and determine whether you could improve in any of these key areas.

Suzanne has been a full-time freelance writer for 20 years. She’s written for numerous business and financial publications such as Entrepreneur, Reason Magazine, Home Business Magazine, and Money Crashers.

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