While it’s common knowledge that repeat business is critical for success, many businesses allocate the majority of their marketing budgets to customer acquisition rather than retention. While acquiring new customers is important, consider the following: It costs five times as much to acquire a new customer as it does to retain an existing one, and increasing customer retention by just 5% can result in a 25% to 95% increase in profits.
The statistics speak for themselves: retaining customers increases your business’s success — which is why you should implement a customer retention strategy for each new customer. Market more efficiently, retain customers, and increase profits by implementing the following five strategies for converting first-time customers to repeat customers.
1. Send marketing-savvy thank-you emails
While your customers are likely to receive confirmation emails when they place an order, are those emails effective at promoting repeat business? Rather than a routine confirmation email, take the time to craft a thank-you message that will entice customers to return. Several suggestions include the following:
• Personalization: Your salutation should include the names of your customers (easily automated with email marketing platforms such as VerticalResponse)
• Earned store credit: Instantly credit first-time customers for any purchase made within a specified time period (30 days is good). The free credit may serve as an effective inducement to return.
• Related products and services: Which products and services complement the recently purchased items? Provide new customers with the opportunity to purchase them at a discounted rate — or even to add them to their current order before it ships.
2. Share your mission
What drives your business forward? What is the foundation of your brand, and why are you in business other than to make a profit? If your message resonates with your customers, you can earn repeat business by sharing your mission and values — in other words, by telling your brand’s story to your customers.
Consider the following scenario: you own a restaurant and are committed to serving only organic foods sourced from chemical-free farms and pastured animals. You have taken a stand against animal cruelty and the use of potentially harmful ingredients. Utilize this to forge bonds with customers and integrate your business into their culture. Send an email informing customers of the positive impact their purchase has had. When customers identify with you, they feel confident about making a purchase from you — and they will return.
3. Be useful beyond your product offering
Once you’ve obtained your customers’ email addresses, it’s tempting to spam them at every opportunity. However, a more effective strategy for fostering long-term customer loyalty is to send useful content that customers can use to solve problems and improve their lives on a regular basis — even if your solutions do not always result in immediate sales.
Assume you own a dog grooming business. While you can send emails reminding customers when their dog is due for another appointment or promoting a new flea treatment, you can also cover topics such as how to housetrain a puppy, how to console dogs during storms, and the best dog toys for outdoor play.
While there may not be an obvious segue to promoting your products and services, this type of content is valuable to your customers and is more likely to be read. It helps establish you as an expert, a resource customers can turn to for advice, and significantly increases the likelihood they’ll return when their dog’s next grooming appointment is due.
4. Create an email autoresponder campaign
Perhaps you’re familiar with Ron Popeil, the eponymous infomercial host who coined the catchphrase “set it and forget it.” Email autoresponders enable you to create a series of emails in advance and then send them automatically to customers at pre-defined time intervals. They’re ideal for establishing repeat business.
Once a customer makes their first purchase, their email address can be added to your autoresponder campaign, which will send them a series of emails similar to the ones below:
• Instantly: A discount coupon for future purchases or an invitation to join your rewards program.
• Week One: Useful information that is not always promotional in nature
• Week Two: Products that are similar to what they purchased and align with their interests
• Week Three: An invitation to write a product review or share it on social media in exchange for double store credit
• Week Four: A guide to maximizing their enjoyment of their interests, complete with links to products and services that can assist them in accomplishing their objectives
Naturally, your autoresponder emails should be customized for your customers and business, and you can create as many emails as you want — up to a full year’s worth — to automate your marketing and earn repeat customers.