Utilizing return customers makes good business sense. In many respects, you have already overcome the difficult hurdles involved in the transaction. You’ve got them interested in your business or product and you have even made a sale. Customer acquisition is hard. Once you’ve got this customer hooked in, proving your worth to them, and ensuring that they become a loyal customer and return to your business means that instead of making a one time profit, you can build a long-term relationship.
Consider the bar owner giving out free drinks. They might be doing this out of the kindness of their heart. The chances are, though, that they want to ensure that you make a second purchase, and then a third, and continue to return to the bar. This is the oldest—and most effective—trick in the book. In this guide, we’re looking at some largely untapped customer service tips to turn new customers into repeat customers!
Repeat or Returning Customers – What Is The Difference?
Some people define repeat customers and return customers slightly differently.
Generally, it is accepted that a repeat customer is someone who can be considered loyal in some way. They may make a conscious decision to come back due to their experience with your business.
A return customer may just be someone who has come back to make another purchase. No loyalty is implied. If you run a convenience store, someone may return to your store because they are nearby. This merely makes them a return customer.
Customer retention should be your aim here. You may hear people in business refer to a “customer lifetime value.” This means the profit you can stand to make from a loyal, repeat customer. Rather than going to a photography studio once, if someone chooses to return for yearly portraits, their customer lifetime value is far higher.
It is vital to keep customers coming back because they have had a positive experience, or by enticing them with other techniques. Let’s delve into some of those tips now.
1 – Introduce a Loyalty Program
This isn’t the most original idea in the world, but it is often untapped by small business owners.
A lot of people wrongly assume that a customer loyalty program is a lot of work. Big businesses tend to have some sort of reward scheme for repeat customers, but can merchants set up this sort of program on their own? The answer is “yes!” There are many types of loyalty programs to choose from depending on your budget, niche, and audience:
Your loyalty program can be as simple or as complex as you like. If you run a food and drink outlet, the “old fashioned” method of giving stamps on a card for every purchase can still be enough to bring people back. Luckily, things can be a little more high-tech for most businesses.
There are a number of apps that make it easy to launch your own loyalty program, with some of them giving the option to create your own downloadable application for customers to put on their cell phone. This guide to implementing a loyalty scheme is full of recommended apps and alternative systems to reward regular customers.
You can even use systems that don’t require an app download, and your virtual receptionist can ask someone whether they would like to opt into a rewards program. This can be turned into a part of your business call-answering script and allows you to digitally “stamp” their account, activating rewards on future purchases.
It’s up to you what you reward and how. You might give your customers discounts when they spend a certain amount with your business or exclusive promotions with a purchased item. Shoppers often love to feel like they are getting something exclusive or to be part of the “club” and loyalty programs are a great way to introduce a sense of exclusivity.
2 – “Flip” a Negative Experience Into a Positive
Somebody having a bad experience with your business doesn’t mean you are bad at what you do. Customer complaints are virtually inevitable. You might even experience angry customers. Staff might let standards slip momentarily, or you might encounter someone who is a serial complainer.
If you have a disappointing experience with a business, you probably won’t go back unless you have to. Or, unless the business really goes out of their way to make things okay again. Turning complaints or negative reviews into an opportunity isn’t easy, but it can be very impactful.
Your most unhappy customers are your greatest source of learning. – Bill Gates
So how should the business work with the customer’s criticism? The key trick is to look for the truth in what is being said. Negative reviews and feedback can be hard to take, but they might be justified. Maybe your service was too slow. Maybe the person who answered the phone was rude and didn’t take a customer’s details properly. Honest and impartial assessment is needed.
Once you have reviewed the experience, it is time to engage the customer and show them a few things:
- That you care about their negative experience
- That you are addressing the issue
- That you don’t want this to be the end of their relationship with your business
You really need to go the extra mile here. Implement a better system based on their issues. If they couldn’t get through to you on the phone, maybe it is time for a virtual receptionist plan. If their service was too slow, maybe it is time for more staff. Tell the customer what you are doing to fix things. If you’re serious about that customer coming back, you may have to go further than this. Provide them with a discount, or a full refund and a discount on a future purchase. At the point of a customer being disillusioned with your service, you have nothing to lose.
Ever heard those stories about a CEO taking matters into their own hands after a customer complaint? This is an opportunity for good PR, and also to bring a lost customer back and turn them into a repeat customer. If you understand the customer value over their lifetime, giving them a discount in the short-term will usually be well worth it.
3 – Create A Sense of Community Among Existing Customers
This is a tip that may not hit your business financially. Instead, it requires you to put in more effort and go further to create a sense that a customer is supporting something worthwhile. More and more, customers and shoppers are becoming conscious of where they are spending their money. Some people are making a conscious choice to try and support independent retailers, for instance. A way to reward this is to create a sense of community.
There are many ways in which you can do this. Simply reaching out to customers and being communicative throughout the buying process (without pushing more sales) is a great way to ensure someone you care about their business.
This clever example from Derek Sivers when he founded CDBaby in the 90s shows how simple the process can be. Sivers knew how to keep customers coming back. The confirmation email gave a sense of community, showed that the company cared, and even raised a smile.
You can be really flexible with how you create your sense of community, just ensure you are focusing on value for the customer. Some examples could include:
- Ensuring that you schedule a follow-up phone call after a purchase. Ask your customer how they got turned onto the product and what could be improved.
- Hosting regular events to reward and thank your return customers. If you run a bar, this could be in the form of a free drinks reception.
- Providing videos and blog posts about how to get the most out of your product or service.
Many people are used to ordering from huge online stores, and though this is often unavoidable, it is easy to feel a little ignored. Huge retailers can feel faceless. Use this to your advantage by creating personalized experiences and chatting with your customers.
4 – Be Memorable
One of the issues facing businesses is the amount of choice their customers have. Customer retention is harder when there are 10 businesses in your town offering similar services. So one effective way to make your mark on shoppers is to provide a memorable experience. You can probably think of a time someone went the extra mile for you in customer service. The fact that this is etched into your memory shows just how important it is.
This can be done in so many different ways, and it is hard to provide business-specific advice, but here are some examples that might spark your creativity:
- Give something free away with an order. If you order takeout from three different places in a month, and they are all good quality, but one includes free dessert, which one are you most likely to return to? These small touches might not cost much to your business, but they can ensure you stick in a customer’s mind.
- Be attentive. This is one of the easiest ways to make yourself stand out. We’re not talking about going into a full “sales” mode. Instead, giving your customers undivided attention and providing them with the answers to all of their questions might be a way to stick in their memory. There’s a fine line between this and being imposing. Only offer customers help if they want it. If a customer is open to sharing their own buying requirements with you, you can advise them on what you have to offer, and even provide them with tips to get the most for their money. Customers appreciate this human touch.
- Provide a system for feedback. This is about much more than just customer reviews. Allowing for feedback means that customers can help you to improve your business. It is also a great way to let customers feel part of what you are doing. Existing customers might even be able to recommend new products for you to stock or point out potential improvements you hadn’t thought of.
Being “memorable” is vague advice, we know. It is so different from one industry to the next. Think about whether you can be memorable by creating an amazing environment, going the extra mile, or providing exceptional aftercare to build that customer loyalty you need. The art of being memorable is often just about putting in the effort, and having a team ethos of wanting to help people and provide a positive experience. If your staff don’t buy into this, you are fighting a losing battle.
Summary – Embracing Return Customers
It’s easy to obsess over bringing new customers to your business and forget about the customer lifetime value. The fact is, many business models rely on the existing customers coming back time and time again. Return customers for a local business are completely essential. The four tips above can definitely provide you with a solid basis for ensuring customers keep coming back, allowing your business to grow and reap the financial benefits as a result.
Frequently Asked Questions
Why are returning customers important?
Returning and repeat customers are vital to most businesses. The reason is simple; a one-time customer limits the amount of money you can make, whereas the lifetime value of a customer means you can profit for years. If you stay with a phone contract for one year, the network makes some money. If they impress you and you stay for life, they make far more.
What keeps customers coming back?
There are numerous things that keep customers coming back. Knowing that they can rely on the service or product you have created is vital. Without providing consistency, a customer returning is unlikely. Being memorable and available whenever a customer needs you are also ways to ensure customer returns.
What's a good returning customer rate?
This varies depending on the industry you are in. Most people accept that a returning customer rate of between 20% and 25% is good, but in other industries, a higher rate is definitely achievable. The competition you have in the local area may also play a part.