Digital marketing campaigns are too often focused on reaching new markets, acquiring new customers, and putting one’s brand in front of new eyes. Naturally, the acquisition of new clientele is important to the growth of a business, but what about the customers you’ve already got?
Interestingly, around 61% of SMBs report that repeat business accounts for over half of their income. From small businesses juggling the tightest margins to larger corporations seeking to maximise profit, existing customers are often fundamental to success.
It can cost as much as five times more to acquire a new customer than it can to retain one who’s already engaged with your offering—whose proven brand loyalty is likely to generate a dependable, long-term source of income for your business. But how to ensure the new customers you acquire stick around for the long haul?
Concocted by the ‘busy bees’ here at beefound, this guide to digital marketing strategies for repeat customers explores the various benefits return customers offer businesses of all sizes and industries, as well as the techniques you can use to keep them coming back to your ‘hive’, making you more ‘honey’ in the long-term.
Contents
- Defining repeat business
- Why is repeat business important?
- How to measure repeat business
- Calculating return customer rate
- What is a good returning customer rate?
- How to win return customers: top 8 tips for customer retention
- 1) Place greater emphasis on customer service
- 2) Keep in touch with customers via personalised email marketing
- 3) Website and SEO optimisation
- 4) Design a memorable brand
- 5) Pay-per-click (PPC)
- 6) Loyalty programmes
- 7) Respond promptly and professionally to all comments, mentions, and feedback
- 8) Social media marketing
- 9) Develop an app for smartphones and tablets
- How to optimise customer retention with beefound
Defining repeat business
In its simplest form, ‘repeat business’ refers to customers and clients who return to your goods and services on a regular basis. Also known as ‘customer retention,’ this is the process of converting a one-time customer into a long-term asset for your business – as valuable for their brand loyalty and ‘social selling’ potential as they are for the profit they generate.
Why is repeat business important?
The advantages of returning customers are many, and go far beyond the obvious profit generated by their repeat purchasing of your goods and services. Below is a list of some of the most notable benefits they can generate.
- According to Harvard Business Review, it can cost anywhere from 5-25 times more to attract a new customer than it does to retain an existing one, meaning that focusing your marketing strategies on retaining customers can be hugely cost-effective.
- The probability of selling goods or services to a return customer is between 40-65% higher than selling to a new customer.
- Repeat customers are loyal customers, who are likely to care more about your brand and help improve your brand awareness by encouraging friends and family to interact with you.
- These same customers may also occasionally produce their own content promoting your brand (known as UGC, or user-generated content), or post positive reviews, providing you with free advertising and improved SEO.
- Existing customers offer both individuals and enterprises a relatively stable, dependable source of income, forming a financial foundation upon which to grow.
- Repeat customers are also generally more valuable than new, or one-off customers, reportedly spending up to 67% more per purchase or conversion.
- The number one reason customers leave a brand for a competitor is because they feel underappreciated, demonstrating the importance of customer retention digital marketing strategies.
- As stated in the introduction, around 61% of SMBs report that over half of their entire income comes from recurring business.
How to measure repeat business
Knowing how to measure repeat business enables you to track the progress of your customer retention digital marketing strategies, and tweak them as you go so as to maximise their impact.
Repeat business is generally measured by three key metrics:
- A customer’s lifetime value: Defined as the money a customer is liable to spend, on average, during the lifespan of their engagement with your business. You can also take into account the potential social value of a customer, as well.
- Your customer retention rate: This is the rate at which you are able to convert one-off customers, or new customers, into long-term customers. We’ll discuss this in greater detail below.
- The repeat purchase rate of your products and services: How often your offerings are engaged with multiple times by the same customer, demonstrating the value of your products and services to your customer base.
Calculating return customer rate
Perhaps the most important metric by which to assess your company’s customer retention is ‘return customer rate.’ Calculating your return customer rate is fairly straightforward using the formula below:
Rate (%) = (No. of returning customers / Total no. of customers) x 100
For example, if you were to have 50 repeat customers out of 200 total customers, you would calculate your rate like so:
(50/200) x 100 = 0.25 x 100 = 25% return customer rate
What is a good returning customer rate?
Understandably, you might well be wondering, ‘what is a good returning customer rate?’ – one which you should be aiming for. The answer, however, depends on the size of your business, the industry you’re in, and the types of goods and services you sell, among other factors.
For example, a Ferrari dealership whose goods (cars) start at around £50,000 is liable to have a lower returning customer rate than a massage parlour whose services (massages) start at just £20. In this example, however, you can already begin to see that the value of returning customers will be far higher for the Ferrari dealership than the massage parlour, and as such the dealership can afford for its customer retention rate to be lower.
Regardless, if you’d like a base figure by which to measure yourself, you can take the average returning customer rate reported by ecommerce businesses on Shopify – which is 27%.
How to win return customers: top 8 tips for customer retention
The foundation of any good customer retention strategy is, necessarily, a quality offering. Without a product or service which stands out from the crowd, is dependable, and fulfils your customers’ needs or wants time and time again, no amount of digital marketing nor customer service will keep business coming back.
In other words, the tips, tricks and strategies offered below—including digital marketing strategies for customer retention—cannot encourage your customer ‘bees’ to collect more ‘pollen for your hive’ if the resulting ‘honey’ tastes rubbish!
So, with a quality offering under your cap, you can focus on improving your customer retention rate by employing a combination of these 8 top tips—combining traditional modes of customer service with digital techniques designed to improve the overall customer experience.
1) Place greater emphasis on customer service
Right at the top of the list of reasons why customers decide to ditch one brand in favour of another is the quality of the relationship you are able to build between staff and clients. With so many competitor offerings on the market, the primary thing standing between your existing customers and another brand is the customer service you offer.
Quality customer service means listening to what your customers want, actively seeking their feedback, and acting on it promptly and plainly. Other elements contributing to a meaningful customer service include:
- Apologising for any mistakes made—be they by your staff or, for example, in a fault with your product—and find tailored ways to compensate the customer for their inconvenience. For example:
- Offer them a refund and a discount on their next purchase
- Send them a replacement product free of charge
- Write them a personalised apology letter or email
- Treat both new and existing customer enquiries with equal care. Assuming that your existing client base will be more understanding of delays in customer service or issues with your offering is a surefire way to lose repeat business.
2) Keep in touch with customers via personalised email marketing
We’ve just covered that the top reason customers give for leaving one brand for another is that they feel underappreciated, or their devotion goes unrecognised, by a company.
A customer who brings your company business time and again is not only aware of the money they’ve injected into your brand, but also rightly feels owed some sort of acknowledgement for their loyalty – if not an outright reward (see tip #6).
One way to make sure your return customers know how valued they are is to employ a personalised email marketing campaign. E-newsletters and relevant blog posts can be shared alongside new products and services of genuine relevance to each of your customers, along with messages of gratitude for their engagement with your brand.
3) Website and SEO optimisation
Let’s take a break from discussing hands-on customer care for a second, and look instead at the behind-the-scenes digital art of improving the customer experience.
Part of having a quality product or service is ensuring that the customer’s journey with your company is of equally high quality. With so much business conducted online these days, when a customer they visit your website it is paramount that their experience is smooth, enjoyable, and functional.
The UI (user interface) of your website must be optimised for UX (user experience) – ensuring that the customer can find everything they want without hassle, whilst being recommended additional products and services which are genuinely relevant to them. For both new and existing customers, a smooth and accessible website creates an environment they’ll feel confident coming back to.
You can further entrench your company’s branding in the minds of new customers—thus encouraging them to return to your offering—by developing your SEO. The more optimised your website and social media content are for search engine discovery, the more your customers will be exposed to your brand—helping in time to increase your rate of returning customers.
4) Design a memorable brand
Want to retain a customer’s business? You’ve got to learn how to stick in their mind. Brand recall is fundamental to the success of most modern brands, especially in an increasingly globalised and competitive online market. Your ‘brand experience’ should include a memorable name and, if appropriate, slogan, as well as unique and eye-catching logo design, colour palette, and marketing campaigns.
When combined, these elements can create a brand which is instantly recognisable—as a coherent company whose offering is evident. The better your brand sticks in the brain, the more ‘bees’ will come ‘a-buzzing!’
5) Pay-per-click (PPC)
PPC advertising is another type of digital marketing strategy which, when managed correctly, can help you attract return customers. PPC helps you to place your ads toward the top of SERPs (Search Engine Results Pages) for queries relevant to your business.
For example, let’s say you provide tailoring and dry cleaning services. A previous customer of yours who came to you to have a suit made may, at a later date, use Google to search for where they can have that suit locally dry-cleaned.
With PPC, you can aim to place that hypothetical ad for dry cleaning directly in front of this customer—who, having used your services before, is more likely to click on your ad and bring you repeat business.
6) Loyalty programmes
You’ll have no doubt come across loyalty programmes before; possibly even participated in them as a customer—such as at your favourite local coffee spot or record shop. Loyalty programmes are a low-cost initiative with a decent engagement rate when well-crafted.
The draw of a reward for loyalty is often enough to encourage that loyalty, even if the reward is something as simple as a free coffee for every ten coffees bought, or £10 off of an album once you’ve spent £100 on records.
Loyalty programmes also help to make the return customer feel recognised and valued for their brand loyalty—something which, as we mentioned before, is fundamental to improving your customer retention rate.
7) Respond promptly and professionally to all comments, mentions, and feedback
We would be remiss not to mention the extraordinary value of customer engagement. From social media posts to emails and review sites like Trip Advisor, customers both new and old will always be looking for ways to interact with your brand—whether to compliment you or complain… Whilst this may seem daunting, it presents an invaluable opportunity for you to strengthen the bond between you and your customers.
Engaging with customers through replies, mentions, and public ‘thank yous’ on social media—or via personalised replies to emails—shows your customer base that they are truly valued. It can also help to quash potentially reputation-damaging complaints before they spiral out of control.
Not only does customer engagement foster a higher retention rate—by building healthier, personable relationships with existing customers—it also demonstrates to prospective new customers the kind of favourable treatment they can expect to receive if they also interact with you on socials or via alternate contact methods.
8) Social media marketing
And speaking of social media, it is an increasingly important and effective medium for digital marketing. Social media marketing utilises both business-generated and user-generated content to advertise your offering, promote brand awareness, and make direct connections with prospective and existing customers.
Having a social media presence has, in fact, become so important that it is almost a necessity for the modern business. When it comes to repeat business, social media is integral to fostering a deeper connection with existing customer and encouraging them to return to your offering.
One particularly effective way to regularly remind your return customers of your presence and promote your brand to them is to utilise content pillars. Content pillars are central ideas, issues, and concepts relevant to your business which you create branches to from a variety of interconnected topics.
Carefully crafted content can redirect repeat customers over and over again to your profile from a range of different angles – cementing the value of your business in their minds.
9) Develop an app for smartphones and tablets
Last but not least, this digital marketing technique for retaining repeat business is not necessarily for everyone. For small businesses with tighter marketing budgets, for example, low-cost methods like SEO are likely a better starting point.
However, if you have the available capital, the creation of a smartphone app for your business can be a highly effective way to re-engage with existing customers, whilst providing them a UX-optimised platform with which to easily – and with any luck, regularly! – purchase your products and services.
Moreover, an app for your business also creates an exclusive digital space – outwith the undeniably cluttered landscapes of social media and web browsing – for your brand. One which, when opened, offers customers no option but to engage with your business.
How to optimise customer retention with beefound.agency
We hope that in following this guide to return customer retention with digital marketing, you now feel better equipped to improve your returning customer rate and reap the benefits.
Of course, we are aware that not every business has the resources necessary to devote to an effective digital marketing campaign. But just because you don’t have the time or money shouldn’t, we feel, mean that you have to miss out on the myriad advantages of repeat business.
For affordable, tailor-made digital marketing management, remember that you can always outsource your customer retention needs to local experts in the field. Here at beefound, we provide a range of digital marketing services to exacting standards – each developed in keeping with our clients’ goals and budgets.
Get in touch with the ‘busy bees’ at beefound.agency today and start enjoying the financial and reputational security of long-term customer retention in no time at all.
