Repeat Customers: What They Are and Why They Matter

One of the best ways to increase your eCommerce profit margins is by maximizing the value of existing customers rather than enduring a constant churn of new customer acquisition and loss. Focusing on repeat business can help you increase marketing ROI, ensure cash flow throughout the year, and improve your brand’s reputation. Each repeat customer has many times the value of a new customer who hasn’t yet made their first purchase.

In this post, we look at the difference between customer retention and new customer acquisition, how to build a loyal customer base, and how to maximize the value of returning customers.

The repeat customers vs. customer acquisition

The marketing math here is straightforward: It’s cheaper to retain an old customer than recruit a new one.

Increasing your customer retention rate by just 5% can increase your profits by a minimum of 25%, according to research from Bain & Company. Loyal customers tend to spend more over a longer period of time, which helps your long-term profitability too. And churn costs you because acquiring new customers is more expensive than retaining existing ones.

But why? What makes the repeat customer so valuable? There are several factors:

It’s easier to sell to existing customers. You already know they’re your target audience. You know how to contact them with email marketing, and you can use customer data to guide your messaging and encourage a repeat purchase.
Your current customers buy more, especially at peak times. While major shopping events like Christmas are a good time to reach new people, your repeat customers also have a significant role to play.
Repeat customers become brand ambassadors. They keep choosing your brand over others, which means they’re well-placed to write reviews and provide customer feedback that you can use as social proof for your product. Loyal customers are more likely than first-time customers to post about your brand on social media and recommend your products or services to their friends.

One overlooked factor in delighting first-time buyers and loyal customers alike is fulfillment. When you ship an order, the accuracy of the items in the package, the skill in packing the box, and the speed of delivery drive customer satisfaction. At Red Stag Fulfillment, we’ve seen that an outstanding logistics success partner can increase customer lifetime value and drive business growth.

Turn fulfillment into your secret weapon

How to build a loyal customer base

Think about your own experiences as a consumer. What makes you keep buying from a brand?

It’s not just about providing good products and services – although that definitely matters. It’s also about creating an amazing customer experience and giving people extra reasons to return.

You can maximize customer lifetime value by implementing customer retention strategies and encouraging current customers to recommend your brand. These efforts may include:

Fast and accurate order fulfillment, with short delivery times and a delightful unboxing experience
Customer loyalty programs that reward repeat customers with discounts and special offers
Building a brand community and inviting good customers to join
Providing educational and entertaining content that enhances the customer journey
Keeping customers engaged throughout the year, soliciting customer feedback, and asking for referrals
Excellent customer service with fast follow-up when a customer has an issue

Let’s look at these points in more detail.

Order fulfillment and delivery

When customers buy online, they don’t get the immediate gratification of shopping in-store. They hand over their money and trust that they’ll get the items they want, in perfect condition, without waiting too long for delivery. Meeting those expectations is critical to customer retention.

To provide a better customer experience, give regular updates on the progress of an order, send delivery notifications, and provide a customer service helpline that’s easy to reach. Partner with a 3PL that provides excellent eCommerce fulfillment with low error rates and fulfillment guarantees, and you’re on your way to building happy customers.

Customer loyalty programs

Find creative ways to reward your customers. Discounts and coupons are great – but also consider rewarding them with free shipping, early access to new products, or even enlisting them as product testers.

A customer loyalty program that gives your best returning customers a lifetime discount might seem like a money-losing proposition. However, loyal shoppers bring so much value to your brand that it’s a win for you and your customer. When considering the cost of customer acquisition, spending a little to keep an existing customer is a good value.

Building a brand community

One of the most potent motivators you can offer online shoppers is a chance to belong. The opportunity to be part of something exclusive is valuable for many consumers. Online brand community spaces provide excellent opportunities for cross-selling and upselling, increasing the value of your best customers.

That’s the idea behind a brand community. Instead of shopping in isolation, you build links between your customers and your brand. Efforts, including Facebook groups, online events, and brand blogs or magazines, create a sense of partnership and belonging. Investing in brand community building is a terrific way to keep your products top of mind.

Offering amazing content

Content is everything from the product descriptions on your website to the email marketing newsletter you send every week to the how-to video you post on social media. It even includes the conversation you start in the comments section of a product page or blog post.

Use content to keep customers interested, teach them more about your brand, and strengthen your brand community. Content can be a hard sell as part of your marketing strategy because it’s an investment that won’t bring immediate returns. But over time, a strong content strategy is a vital element in building a loyal customer base.

Keeping customers engaged

Engagement is the key to turning a first-time buyer into a repeat customer. Every new customer represents an opportunity to build lifetime value, encourage future purchases, and spread the word about your brand.

Develop an onboarding process for first-time customers that welcomes them into your brand family and lets them know about opportunities to access special offers. Use customer metrics to provide a personalized experience, with targeted advertising, remarketing, and coupons to encourage repeat customers.

Boosting your commitment to customer service

Excellent customer service can increase your conversion rate by providing critical information before checkout, and it’s even more crucial once someone has made their first purchase. Customer service that will boost customer loyalty includes answering customer questions 24/7 and resolving problems quickly and compassionately.

Even a small business can afford to provide excellent customer service. Start with a detailed and easy-to-find FAQ page that answers the most common consumer questions. Add a chatbot to provide basic, real-time information and refer more complex issues to a live representative. Use an autoresponder, so customers know you got their email inquiry and will respond soon. You increase loyalty when your customers know you’re listening to them and care about their experience.

Now for your next challenge: maximizing the value of all those repeat customers.

How to maximize customer lifetime value

As we’ve discussed, your current customers aren’t just important because they spend more. They represent a huge opportunity for your business because they’re highly likely to act as brand ambassadors. A personal product endorsement has more value than a message in an ad, and you should include customer retention as part of your marketing strategy.

Here are a few ways to encourage repeat customers to talk about your brand as much as possible.

Word-of-mouth marketing

It might seem strange, given how much effort and creativity companies put into marketing plans, advertising spots, and content creation, but the most effective, timeless tool in every marketer’s kit is customer recommendations.

As a general rule, people trust people more than they trust brands. If a friend or a family member tells you they just discovered a great company, that recommendation will carry more weight than if you see an ad by the same company.

Word-of-mouth marketing should be natural, spontaneous, and unscripted, not boosted with incentives. So instead of encouraging it explicitly, focus on giving customers plenty to talk about with their friends and family.

Achieve this by making great products, going the extra mile with customer service, and regularly sharing exciting content that starts conversations. In other words, create an experience your customers are eager to share with others.

Social proof has a similar effect to word-of-mouth marketing, but it works a little differently. Instead of telling people about your brand, your customers show that they love your brand by posting photos and videos of themselves using your products or services online.

You absolutely can and should encourage customers to post about your brand on social media. Here are some ways to reward your best customers for social proof:

Reshare their posts about your products
Comment and like posts about your products on social media
Set up a dedicated gallery or stories highlight to showcase customers’ posts
Run a prize drawing for people who post about your brand each month
Send brand merch to people who regularly post about your brand or to influencers whose posts generate a lot of attention for your brand

These rewards amplify the reach of the original posts so that the social proof has even more of an impact. They also provide positive feedback for customers who post social proof, which encourages them to keep doing it.

Online reviews

Online reviews can make or break your online store. Customers can post reviews on your website, social media, or a long list of sites like Yelp and TripAdvisor.

Happy customers bring extra value to your business by writing positive reviews. Even a neutral review helps shoppers trust your brand; simply adding to the number of online reviews can boost credibility and brand awareness.

You can encourage people to write reviews, but you can’t insist on those being positive reviews. So, as with word-of-mouth marketing, your best strategy is to create an amazing customer experience.

You can offer rewards for customers who write reviews, regardless of tone. Again, try to be creative with rewards, offering discounts, reward points, exclusive content, or early access to new product releases.

Your best customers and your 3PL partner power your business success

Focusing on a great customer experience will create a community of happy customers who love to talk about your products and services, and your business will enjoy the benefits. Order fulfillment is a crucial element in customer experience that helps with customer retention.

Working with a strategic logistics partner (otherwise known as a 3PL) that understands your quality standards is essential to building the number of repeat customers in your business. At Red Stag Fulfillment, we treat your customers as if they were our own, striving to provide the best customer experience with every package we ship.

We provide industry-leading fulfillment accuracy and service, so you can focus on all the other strategies that let you keep repeat customers happy.