Attracting new customers is a priority for every business – even when you know your regulars are valuable, it’s hard not to get caught up in chasing new ones. But you might be surprised at just how important your repeat customers are. Our data shows that repeat customers make up 91% for grocery businesses and 90% of customers for cafes, restaurants and bars. Even in the accommodation sector, returning customers make up 48% of business.
Not only that, repeat customers spend around twice as much as new ones, and a lot more than double when it comes to food and drink:
Source – TRA - August 17-July 18
The high value of repeat customers is a strong and well-established trend, and it remains stable throughout the year – when Kiwis do their Christmas shopping, they go back to the places they know.
So how can your business retain its valuable existing customers? Research by Massey University has found that while loyalty schemes can work well, they can be expensive and difficult to change. Instead, the most effective way to foster customer loyalty is to treat your existing customers like they’re important to you (which they are). Here are three easy ways to start the process of giving your loyal customers the VIP treatment:
People buy from people
Recognise your customers and show you remember them. Building relationships creates loyalty in a way that no amount of special discounts can achieve. You need to talk to your customers, listen to their answers and greet them when you see them again. You also need to listen to their feedback, even if you can’t implement it.
In some ways this is obvious, but it’s not necessarily easy – getting every employee to treat your customers this way can be a huge challenge. It means building and maintaining a team of employees who hold themselves to a high standard. We can provide you with mountains of data about your customers, but that’s no substitute for genuine conversations and connections.
Be on your customer’s side
When your customers buy something from you, your business is solving a problem for them. In some cases, there’s more than one way to solve that problem. By trying to do the best for your customer, even when it might cost you some profit in the short term, you have a better chance of retaining that customer for many years.
That might mean ordering a product instead of selling your customer an alternative you have in stock; or showing them a cheaper option that will do what they want when they’re about to buy something more expensive; or providing a replacement product that’s better than the original when something goes wrong. We’ve heard stories of businesses going as far as ordering products from competitors and having them shipped to their own customers when they couldn’t get stock – this has resulted in some great social media publicity when the customer took to Facebook to compliment the business’s initiative.
Be convenient
Customers are strongly driven by convenience, with younger New Zealanders increasingly looking for quick, easy ways to shop. You can increase convenience for your customers in many ways, starting from the basics of physical store layout, all the way through to the check-out.
Tap and go credit card payments at checkout reduce queues and are very popular with shoppers. If you have an eCommerce site, you can offer Online Eftpos, which is a rapidly-growing option that lets shoppers pay with a few clicks on their mobile phones. And good store design also applies online – making it easier to navigate your eCommerce site makes shoppers less likely to abandon their carts.
Take it up a level
These ideas are just a starting point. Think about other ways your business can show repeat customers that they matter. You can use Paymark Insights to give you more data about your repeat customers to help you serve them better. You might consider a loyalty scheme; think it through carefully and weigh up the pros and cons. Make sure your existing customers aren’t being penalised with legacy pricing or products. And ensure that everyone at your business knows that repeat customers are worth twice as much as new ones.