The Value of a Repeat, Loyal Customer

In today’s post, I want to teach you the difference between repeat customers and new customers.  For the sake of your business success, I want you to know right now that repeat customers are much more profitable (and valuable) than new customers.

Most businesses just focus on finding new customers.  Rather than taking care of the customers they currently have, they focus all of their time, money and energy on finding new people to sell their products and services to.

Once they make the sale with their new customer they quickly forget about them and then go look for someone else to sell their product or service.  It’s a never ending cycle.  These foolish entrepreneurs treat their customers like a one night stand.

Let me give you a few examples:

  • How many times did the person that sold you a car contact you AFTER the sale?
  • How many times did your realtor contact you after you closed on your home?
  • How many times did your insurance agent contact you after the sale?
  • How many times did the electronics store where you purchased your flat screen television at contact you after the sale?
  • How many times did the pizza join you visited last Friday contact you?

The answer for most people is the same: NONE.

As a result, you have no loyalty to any of these businesses.  You probably feel like you are just a number, just someone they make a quick dollar off.   Simply put, there is no personal touch.  The business probably provides a good product or service, but they don’t do the little things to make you feel appreciated.

As a result, what happens?

The next time you buy a car you visit a different agent or dealership.  The next time you buy or sell a home you pick a different realtor.  And the next time you shop for insurance you shop somewhere else.  In other words, most of these businesses get NO repeat business from you.

Once again, REPEAT customers are where the real profits are made in any business.

If you own a business, don’t make this short-sighted mistake.  Keep in touch with everyone you do business with on a regular basis.  Communicate with them a few times each year.  Let them know you are there to help.  Let them know you care.  Let them know you appreciate their business, by showing it with your actions.

To do that, try any of the following:

  • Send a handwritten note after they do business with you (every time)
  • Send a monthly newsletter in the mail each month
  • Send them a note or card on their birthday, anniversary or special holidays
  • Call them 2-3 days after they shop with you to make sure they are happy with what they bought
  • Stay in touch via email, phone, and/or mail at least once every 30 to 90 days

By doing that, a few things will happen.  First off, many of these folks will do business with you again, which puts more profits in your pockets.  Additionally, you can recommend additional products or services to these folks, which makes you more money.  And you will get referrals from these folks because you do what most entrepreneurs never do: keep in touch and build a good relationship.

Furthermore, when you are advertising each month, make sure you spend at least 75% of your marketing budget on maintaining relationships and keeping in contact (sending new offers) to your current and former customers.  Most of these folks are already pre-sold on what you have to offer and are a much easier (and cheaper) sell than going out and finding a new customer.

For example, if you spend $1000 per month on advertising, allocate $750 toward sending offers, promotional materials, and correspondence to your current and former customer base, and the remaining 25% of your budget on finding new customers.

And when you get a new customer, treat them like gold.  Make them feel appreciated. Make sure they are happy with the transaction.  Keep in touch with them AT LEAST once every 30 to 90 days.  You can do that through email, phone calls, direct mail and other techniques.  Never let them forget who you are or what you have to offer.

Remember, repeat customers are more profitable than new customers.  New customers will make you money, but repeat customers will make you wealthy.

What are your thoughts?  Leave a comment below and let me know what you think.  I look forward to hearing from you.

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Chuck Holmes


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8 thoughts on “The Value of a Repeat, Loyal Customer

  1. Jason Ruth

    The key to loyal customers is the follow up after the sale. Maintaining their engagement through email is now considered traditional. What makes you stand out are the personal touches. Hand written letters or post cards that are physically mailed to there house is what I think makes someone stand out in the crowd.

    In my 30 or so years of purchasing products or services from companies, you are the only one that does this in all that time. True professional!!

  2. Diamond Grant

    Never considered calling as a good option, but I guess that is because I would much rather text or e-mail than talk on the phone. But I can see how a phone call would be a nice and personal way to keep in touch and ensure your service/product was satisfactory. I know companies who use an e-mail approach similar to that where 1-3 days after you purchase they send a survey where you can rate the company and product. Great ways to show you care and get usable feedback as well.

  3. Greg Boudonck

    The first thing I need to say here is a big AMEN!

    So often, we just treat people like a plastic water bottle; instead of recycling them, we throw them in the trash can and allow someone else to come along and take them away.

    As you stated, we do not have to work as hard to sell previous customers, because they already know the value. They also are a great referral source and they will be loyal if we are loyal. Previous customers can be a great advertising source. If we are in contact often, when they are talking with someone else and the subject comes up, the previous customer will sell the product or service for us.

    It does make great sense to stay in contact; not in a spammy way, but in a caring way.

    Good post. Thanks for the reminder.

  4. Adrienne

    Hey Chuck,

    I happen to agree with you my friend. Repeat customers are the best, they are the ones that are more loyal to you but you definitely have to let them know how much you appreciate them and of course stay on top of things. I would hope that anyone who purchases something from someone would be on their list and they would be making sure that they are still in front of their customers.

    Of course I’m mainly speaking about those who do have an online business like myself and may not have their personal information to send a birthday greeting or thank you card. But just being sure you stay in front of them, that’s the important thing.

    Great share and I hope everyone else will realize just how important their customers are.

    Enjoy your week.



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