It’s easy for retailers to assume their work ends at the point of purchase. Yet that’s precisely where the real work starts.
Today, it’s vital for businesses to not only understand the importance of increasing their repeat customer rate but also learn how they can improve that number. Let’s dive into everything you need to know about repeat customers below.
What are repeat customers?
Repeat customers are consumers who use your services again and again. They are also considered loyal customers.
Paying close attention to returning customers’ data will help you find buyers already making repeat purchases from your store. Gaining more repeat customers leads to additional revenue. As you increase your repeat customer rate, you won’t have to spend as much on customer acquisition. The importance of repeat customers is highlighted by its many benefits.
The importance of repeat customers
- Repeat customers have a higher CLTV
- Repeat customers spend more
- Repeat customers promote your business
- New customers are expensive
It’s a generally known fact that customer retention is cheaper than customer acquisition.
According to Bain & Company, a 5% increase in retention correlates with at least a 25% increase in profit.
Spending more on different retention strategies—providing better customer service or starting customer loyalty programs—can help you win more loyal customers.
Repeat customers have a higher CLTV
Customer lifetime value (CLTV) is higher for repeat customers. With every purchase, a loyal customer will spend more money than a new customer by placing more repeat orders or through upsells. Why? A lot of factors are at play here, but one is trust.
The more repeat customers trust you, the less they hesitate to buy from you. That’s why promoting new products to repeat buyers takes less effort than promoting the products to new customers.
Repeat customers spend more
Not only do repeat customers buy your products more, but they also have a higher average order value than first-time consumers. The number of previous purchases made and how long a customer has used your services directly impact how much a repeat customer spends in your business.
Repeat customers promote your business
Along with increasing sales, repeat customers advertise your business with word-of-mouth advertising, which is one of the best ways to increase your customer base. The more purchases a customer makes the more likely they are to refer you to their friends and family. They’ll be more comfortable making a positive referral whenever they have experienced excellent customer service.
For example, Bain & Company found that after 10 purchases, shoppers refer as many as 50% more people than one-time buyers.
Generally, repeat customers could increase your sales by bringing in new customers.
New customers are expensive
It costs five times more to acquire a new customer than it takes to keep a current one. Making that new customer a loyal one can almost cost you 16 times more. Hence, it’s advisable to spend your budget on repeat customers where it can give you more revenue.
How to identify repeat customers
- Loyalty programs
- Analyze your data
- Point of sale data
- Customer profiles
By studying customer data, you can identify a repeat customer. For example, customer loyalty metrics such as customer lifetime value, repeat purchase sales, and customer retention rate can help you to figure out repeat customers. There are a few different ways through which you can identify repeat customers.
Ideally, you want to entice your existing customers to sign up for your loyalty program. This can be something that your customers can access quickly, such as giving discounts on their first purchase, offering freebies, or starting a loyalty points program. The signup process should be smooth, as frictionless as possible, and easy to follow. Consider onboarding customers to your loyalty program during the checkout process for an easier signup process.
Analyze your data
You can analyze the customer data to identify repeat customers. Do this by calculating the repeat customers rate by the following formula:
(Number of customers who’ve purchased more than once/Total number of customers) × 100 = Repeat customer rate (%)
You can also fine-tune the formulas based on spending patterns:
(Number of customers who’ve purchased X times/Total number of customers) × 100 = Rate of customers who’ve purchased X times (%)
Point of sale data
Customer data in your POS system lets you know how long someone has been a customer, how often they have bought from you, how much they have spent and what products they’ve bought. By analyzing your POS data, you can find out how often returning customers shop from your store, including offline or online purchases, their lifetime value, and even average order value. Studying these numbers can shine a light on how your current marketing approach impacts overall sales and repeat customer rates.
💡 PRO TIP: Analyze your POS data in tandem with your ecommerce data to be more cost effective with your inventory, measure your store’s impact on online sales, repeat purchases, lifetime value, and more.
Depending on the POS system used in your store, you can review your customer profiles to get an overview of purchase history and interests to help you identify and cater to repeat customers.
PDPAOLA, a Spanish jewelry brand, uses Shopify POS’ customer profile feature, which unifies both in-store and online customer purchase data, to enhance its shopping experience. By centralizing its data in one place, PDPAOLA was able to offer more enticing incentives that aligned with customers’ interests and preferences.
💡 PRO TIP: Sending digital receipts via email is a great way to organically collect customer contact information at checkout and build an email list to fuel your retention marketing. Just make sure they’ve opted in to hearing from you before sending them anything.
How to increase repeat customers
- Reward repeat customers
- Focus on customer service
- Offer incentives to repeat customers
- Act on customer feedback
- Use email to stay top of mind
- Review customer data
- Build customer experiences
Let’s look at some of the ways to increase repeat customers.
Reward repeat customers
Surprise your repeat customers by remembering and rewarding them.
Keep the 80/20 rule in mind to grow your business: 80% of business usually comes from 20% of customers.
That’s why encouraging repeat customers to shop is vital to keeping acquisition costs down and increasing revenue.
You can use POS software to track repeat buyers, create customer profiles, and synchronize data so you can offer personalized shopping experiences. You’ll have quick access to data like order history, special notes, and even the total number of customers that have used your services.
Use customer data by adding loyalty apps to your point-of-sale system. Reward customers for shopping with you both in-store and online. Take it a step ahead by sending a personalized thank you note whenever they make a purchase.
📌 GET STARTED: Choose from hundreds of loyalty apps in the Shopify App Store and start rewarding shoppers for purchases they make both online and in-store.
Focus on customer service
The end business goal is to increase profits. This is only possible by ensuring you provide the best customer service to your customers.
For example, Chewy—an online pet retail store—is known for its excellent customer service. It always goes above and beyond to provide exceptional customer service to their customers.
Offer incentives to repeat customers
Everyone loves incentives and discounts. Many times it becomes the reason why customers buy and try out different products to then become repeat buyers. That’s why offering incentives—like bonus upgrades, additional samples, loyalty points, or store credit—can be a great way to increase repeat customers, especially after the first purchase.
For example, FARFETCH has its own rewards loyalty program named Access. It rewards customers on different occasions based on their purchase history.
Act on customer feedback
Do you want a stream of customers that buy from you repeatedly? You need to learn how to apply customer feedback in your business.
Start by asking your customers to fill out customer satisfaction surveys. Many companies use the Voice of the Customer program (VOC) to get insights from their existing customers. Working on customer feedback shows that you’re listening to your customers, you care about them, and you’re a customer-first company.
Use email to stay top of mind
Emails can be a great tool to get multiple purchases from one-time customers. By carefully strategizing each email you send to your customers, you can improve customer retention rates and generate repeat business with several loyal customers.
For example, Anthropologie uses different personalized email strategies to stay connected with its customers. Similarly, Lululemon regularly sends out emails to its customers to let them know about new products.
Some tips to strengthen your email marketing game are:
- Provide product information in your order confirmation email: you can turn first-time buyers into repeat customers by adding product-related information, discount coupons, and related products in the order confirmation email.
- Give more value: promotional emails don’t always sound good. To keep your customers engaged, you can send value-based emails to them.
- Keep your customers updated: whenever you launch any new product or service, keep your customers informed through emails. This will improve customer experience and increase customer engagement.
- Send follow-up emails: after the first purchase, send one or two follow-up emails letting your customers know that they can contact you anytime. Also, make sure to send them personalized emails.
📧 EMAIL MARKETING TIP: Want to put your customer data to work? Try Shopify Email to segment email lists, design and send branded emails, and track campaign results directly from Shopify admin.
Review customer data
You can analyze customer data to customize your services by understanding your customer’s shopping behavior and their likes and dislikes. Use the collected data to inform your practices in your offline and online store to update your marketing strategies.
For example, you can track customer reviews and rankings for your products in your online store to help you sell the best merchandise in your physical store.
Build customer experiences
Some examples to build great customer experience:
- Offer a one-of-a-kind service that lets people show on their own time. Shopping by appointment gives a personalized touch to the experience and customers can get the royal treatment they deserve.
- Offer your customer a seamless check out experience. Accept multiple forms of payment : mobile payments, debit cards, debit cards, and credit cards. Make sure the checkout experience is straightforward, easy, and enjoyable.
- Provide localized shopping experiences. Analyze the products that are most relevant for each store location and stock products that customers want at a local level.
- Be a trusting and caring company. Not only treat your customers kindly but also give equal treatment to your employees, contribute to your local community, and be a socially responsible brand.
For example, Allplants, a subscription based vegan meal delivery service, provides a seamless customer experience. After a customer places an order, they receive a simple text a few days before delivery, prompting them to skip, modify, or pause their orders. That message has a simple link that takes them to a clean, on-brand page that lets customers make updates to their order. The whole process is very smooth, which gives them a high retention and LTV.
Get more repeat customers at your store
It’s too often that businesses miss the hidden revenue within their existing customer base by focusing solely on winning new ones. But with a few strategies in place, retailers can set themselves up to reap the benefits that come with growing and nurturing a repeat customer base. In the end, nurturing and retaining your existing customers is more effective than finding new ones.
Repeat customers FAQ
How do you identify repeat customers?
- Check order history: Many online stores and apps keep track of a customer’s purchase history. This can be a good way to see if someone has made multiple purchases from your business.
- Look for loyalty programs: Many businesses offer loyalty programs as a way to incentivize customers to keep coming back. If a customer is enrolled in your loyalty program, they are likely a repeat customer.
- Ask customers directly: You can always ask customers directly if they are a repeat customer. This can be done through surveys, customer service interactions, or even just casual conversation.
What causes repeat customers?
What are the benefits of repeat customers?
- Are more likely to convert
- Are less expensive to acquire
- Are more likely to refer other customers
- Are more likely to purchase again
- Are more likely to be loyal to the brand