Many businesses focus their on-line strategy on generating new customers while ignoring that building a revenue stream from repeat business is often stronger and easier to do. Many businesses can take around half their revenue from repeat customers. If most of your customers are new then there is a good chance you're missing a golden opportunity.
In this article we'll be looking at a few simple methods to turn your customers into either repeat customers or generators of business. We'll look at a few different business models and how they can all achieve the same goal.
This week's Goal
Our goal here is simple;
"Three months from now I will generate 20% of my revenue from repeat business."
Like all our goals they should follow a quick SMART test; simple, measurable, achievable, relevant and timed. Check.
Communication is key
The simplest tool to use here is email so we'll use email to build up a dialogue with your customers and be open and honest about what you're asking them for; repeat business or a recommendation.
The method you use will depend on your business model so here are a few examples to have a think about:
- E-Commerce / On-Line Shop
If you're running an on-line shop then by the time a consumer's received their goods the chances are you've already emailed them a couple of times. Once to say their order was received and again to say it was shipped. All too often though that's when the conversation dries up - just before the point of satisfaction.
So send one more message a few days after the goods were received and ask the consumer whether they are satisfied with their purchase. Make sure you're prepared for any negative feedback and never allow yourself to take it personally if it comes; focus your energy on fixing the problem instead.
- Hotels, Restaurants, Theatres & Shows
If you're website is only the beginning of the relationship and your customers then come to you then have a think about when is a convenient moment for your customer to provide their email address without being awkward. And be honest.
Why do you want to communicate with them? To gain their repeat custom. So what might you offer in return? A discount, early or priority booking, the best tables or the best seats?
Find something in which your customers will perceive some value and reward them with that as a thank you for allowing you to communicate with them in a way that's convenient for you.
- Professional Services
You might think that one-off service providers would be excluded from this challenge because customers are not likely to generate repeat business but that's actually very seldom the case.
First ask yourself; do you really only supply one product or service? Next ask yourself; do I make every effort to ask for referrals from my clients.
The answer to the first question is invariably 'no' because almost all business sell slightly different products or services to each customer and so consider that each customer has only seen one side of what you have to offer; introduce them to some of your other services.
And as regards question two; referrals are almost as good as repeat business. So if you truly believe you can't possible sell a certain customer anything else then ask for a referral or two. If you don't want to ask up-front then ask for feedback on your service. If the feedback's positive ask them if they would consider referring you. If it's negative then make steps to rectify the problems and, having done so, ask them if your corrections have impressed them enough to justify that referral. Just don't be afraid to ask if you think you deserve it.
A simple, honest email...
The method for generating this repeat business will differ therefore depending on how you interact with your customers. At one end of the scale (e-commerce) you're trying to put a face to an otherwise automated on-line transaction. At the other end of the scale (professional services) a far more personal conversation needs to be had with your customer.
In all cases though try to manage the process as much as is practicable. Prepare an email that can go out to your customers asking for feedback, introducing other products or services, or introducing the idea of a referral.
Speak to your web team about automating the process; for e-commerce sites this should be trivial and for sites where the sale takes place off-line but where the initial enquiry came from the website have your web developers build a link into the enquiry email that you receive on day one that you can click a few weeks later to trigger the email to the customer. File these emails somewhere safe.
Where possible lead the reader back to the website and make sure your tracking responses statistically - Google Analytics is the easiest for this.
Measure your success
Finally, make sure that you're measuring where your revenue comes from! Again, to take e-commerce as a simple example, you can use Google Analytics to track the source (including email) of all your revenue down to the penny. Make absolutely sure this is in place and set up an "Advanced Segment" for repeat business so you can track it easily.
If your business is a little more off-line then make sure your recording source somewhere; it doesn't have to be complicated but you can't improve what you don't understand - and if you're not measuring it you're not understanding it as much as you'd like to think you are!
Achieving 20%
20% of your revenue from repeat customers is perfectly achievable - whatever your business model - so long as you start today. And in three months time you can look to increase it further, of course.
Repeat business provides stability and predictability and its usually far cheaper to generate than it is to go out and get new business of the same value. What's more it grows. Happy customers can sell your business just as well as your sales team.
So remember:
"Three months from now I will generate 20% of my revenue from repeat business."
... and then you can stop obsessing over Google.
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