For all the business owners out there looking to scale their sales and revenue, here’s an incredible fact. 80% of your company’s profits can be generated by a mere 20% of your customer base!
Does this mean that the 20% will make the most expensive purchases from your brand in one go, thereby scaling your profits? No! However, they can make numerous purchases from you over time. Instead of directing resources towards acquiring new customers every time you wish to make new sales, you can get new sales from your existing customers. These repeated purchases will ultimately boost your profits.
Such is the power of repeat customers.
Who are Repeat Customers?
Let us visualize the process that a business goes through to gain a customer. It begins with marketing tactics when a company spreads the word about its products with the intention of getting people to make a purchase. As a result of these endeavors, a lead is generated. The lead must then be nurtured, which takes up a lot of time and resources. After going through so many efforts and winning a sale from a client, a company must immediately gear up to repeat this process for the next sale. However, what if there was a way for a company to skip the journey, and directly reach the destination? With effective customer retention, companies do not need to follow the lengthy acquisition process but they can still get sales!
Repeat customers are those customers who make purchases from your brand again and again. They are like a gift that keeps on giving because you can rely on them to provide a steady stream of income for your business. Repeat customers are fiercely loyal to your brand since they keep choosing your products over the several options available in the market. Their loyalty is also indicated by the fact that they spend up to 67% more on brands than new customers. The more repeat customers your business gets, the more your revenue and profits can grow. Although, this is only one among the several other advantages that repeat customers have for a business.
How do Repeat Customers Benefit Businesses?
A common problem with most businesses was that they solely focused on customer acquisition, often ignoring their existing customers. However, this has changed now. Businesses are realizing the pressing need of focusing more on customer retention, and it has become the #1 priority for the majority of businesses in 2023. This transition has, no doubt, come up due to the increasing awareness of the importance of repeat customers.
Let us explore the ways in which repeat customers benefit business:
1. You can earn more from repeat customers, as they have a higher CLTV
The Customer Lifetime Value is a measure of the amount of revenue a brand can expect to earn from a customer during their entire association. This value is directly proportional to the average customer lifespan. Since repeat customers purchase more often from your brand, their association with your brand lasts for longer. Due to the long lifespan value, the CLTV automatically goes up.
2. They act as advocates for your brand
Repeat customers choose your brand not once, but several times, over the products of your competitors. They display continuous loyalty towards your brand. Hence, they are willing to spread the word about your brand, and they are a good source of high-quality sales referrals. When your repeat customers talk about your brand and share the reasons why they continue to make purchases from you, it creates a high aspirational value for your products in the minds of customers.
3. Acquiring new customers is more expensive
Statistics show that a company takes up to 18 months to earn back the costs of customer acquisition, whereas it takes only 3 months for customer retention costs. Thus, one of the biggest advantages of repeat customers is that they are a cost-effective source of new sales and revenue for a business. Furthermore, repeat sales are more profitable for a company. Even if a new customer makes a purchase of the same amount, the profitability will be lower, since higher costs have been spent by the company to gain the sale.
4. Repeat sales can be closed faster and with lesser resources
Average sales take a long time to close, since the buying journey of consumers involves a lot of stages. Furthermore, a lot of resources have to be directed toward closing sales with new consumers. Repeat customers are already familiar with your brand, your product, and your sales process. Hence, they are not hesitant to make purchases from your brand, which lowers the closing time and the number of resources being directed toward repeat sales.
These benefits are a compelling reason as to why you should aim to maximize the number of repeat customers in your customer base. Although, this is easier said than done. Gaining repeat customers is a complex process, and there are certain challenges involved in it for businesses.
What are the Challenges in Acquiring Repeat Customers?
An average company loses around 10-25% of its customers per year. How can you ensure that your company does not follow this trend?
The key is to understand the reason why these businesses cannot retain their customers and identify the challenges that you may face in acquiring repeat customers. These reasons can be segmented into 3 main categories:
1. Low value on their investment
Customers are the most concerned with the value that they are receiving from your brand and your product. The value that you add for them may be in the form of increasing their efficiency, reducing the prices that were otherwise paying, or increasing the convenience aspect for them. If your brand fails to give them good returns on their investment, they will not be likely to make repeat purchases.
2. Unsatisfactory customer service
One of the biggest reasons why you might not achieve repeat sales is that your customers are dissatisfied with how they are being treated. Despite your products being good, customers will move away from your brand if your customer service is poor. Your customers want to feel valued by you and expect personalized services. If you fall short in these areas, your retention rates will remain low.
3. Lack of human interaction
While digitization is a good thing for businesses, it should not completely replace human interactions. Customers want to connect with your teams, explain their unique concerns, and hear the ways in which you can help them. If they are only left to deal with websites and chatbots, they will not be inclined to make repeat purchases from you.
Once you find a way to overcome these challenges, you will greatly increase your chances of getting more repeat customers. However, even if you are aware of the challenges, it is difficult to actually tackle them. Businesses need some help in bringing their operations to the level that they can delight their customers, and thereby get repeat customers. This help can be provided by a sales CRM!
How can Sales CRM help to Acquire Repeat Customers?
CRM is software that helps businesses manage the end-to-end interactions of their customers with their brand. It allows you to visualize the entire journey of your customers, right from the time they put in an inquiry to the point that a sale is concluded. It is a tool that can give you complete and accurate insights into what your customers expect, and the areas of your operations that fail to meet these expectations. With these insights, you can make improvements to your business which will put you ahead of your competitors and boost your retention rates.
Here are the various ways through which sales CRM helps to acquire repeat customers:
1. It provides early warning signs of customer churn
In simple terms, customer churn means the loss of customers. It is a value that shows the percentage of the number of customers who are unlikely to make more purchases from your brand. Hence, customer churn leads to the loss of repeat customers, and it is essential to prevent this from happening.
With CRM in place, you can map and track metrics like:
- Purchasing patterns
- The performance of your products
- Nature of incoming queries etc.
With this data in hand, you can identify and segment those customers who are likely or unlikely to make repeated purchases from you. You can accordingly take measures to convert more of your customers into repeat customers.
Kylas’s reporting functionalities offer you complete insights into your business health and data. You can track all relevant aspects such as customer churn rates, stages at which churn occurs, etc.
2. It enables you to deploy your best agents to secure repeat sales
Let us imagine that in keeping with the point elaborated above, your business receives warning signs of a potential customer churn. What can you do to convince the customer to stay with your brand? You need to put your best foot forward and hand over such clients to your top-performing agents.
It is not easy to know which agents of your team are performing the best, as it entails the collection and analysis of a lot of data. However, with CRM in place, this can be easily achieved! It tracks the performance of your teams over time and offers data-driven insights. These insights can be used to allocate the right clients to the right agent, thereby increasing your chances of getting repeat customers.
3. It helps in identifying and targeting the right prospects
Every business has an ideal customer, one whose requirements and expectations exactly match the offerings of the brand. It is these customers who have the potential to become repeat customers because your product is a good fit for them. You can identify and target these kinds of customers with the help of CRM, as it allows you to:
- Segregate your incoming leads on the basis of various metrics
- Qualify or disqualify leads as per your custom preferences
- Track the purchasing history & interactions of clients
- Create specialized databases for personalized communications to your ideal customers
With the help of such features and functionalities, you can screen all your prospects, and identify which of your existing customers you should focus more upon.
You can efficiently manage accounts with Kylas and monitor all customer communication and activities in a single platform. This helps you target the right customers for your retention efforts.
4. It enhances the customer service that you provide
71% of customers who leave a brand do so because of poor customer service. A sure-shot way of getting your customers to make repeated purchases from you is to enhance the experience that you provide them. If customers are happy and content with your services, they will automatically be more inclined to buy from you again and again.
CRM helps you optimize your end-to-end business operations, thereby creating a seamless process for your customers. It collates and analyzes customer data, and offers a deeper understanding of their pain points. Leveraging this data, you can provide an enhanced customer experience for them.
5. It automates & personalizes your nurturing efforts
Nurturing your customers well can go a long way toward converting them into repeat customers. The process of nurturing requires establishing meaningful interactions and conducting timely follow-ups. Besides, the nurturing content should be personalized for each customer. This demonstrates that you have put effort into winning them over.
These nurturing efforts can be automated through CRM to ensure that they take place in a timely and systematic manner. Automation also ensures that your teams’ bandwidth is not exhausted in these tasks. Data analytics also help in customizing your nurturing approach as per customer data.
Send your customers meaningful content at the right touchpoints via multiple channels like email or WhatsApp using Kylas’s communication automation features.
6. It helps in the speedy resolution of customer concerns
Customers are 2.4x more likely to make repeat purchases from a brand that resolves their concerns quickly. CRM tools have a variety of features to automate your responses and provide speedy resolutions to your client’s concerns. Thus, your customers develop a stronger relationship with your brand and will be inclined to make more purchases from you.
The fundamental concept behind CRM is the management of customer relations. Repeat customers are acquired as a result of maintaining good customer relations. Thus, it is no surprise that CRM is also the best tool to help in executing your customer retention strategies.
You can set up an efficient calling system with Kylas to help your teams address customer concerns promptly and be there for them every step of the way.
Conclusion
Repeat customers are a boon for businesses, as they scale their profitability. They enhance the quality of your customer base, as they generate sales while reducing the pressure of customer acquisition. The crux of getting repeat customers is to manage your customer relations well. Hence, sales CRM systems can greatly contribute to this.
Take a test run of Kylas and witness how it can transform your operations for increased customer retention. Schedule a demo now!
