Returning Customers And Their Hidden Benefits to Your Business

Two customers walk into your store: one is visiting for the first time, and the other is a regular. Who do you think would be easier to sell to? A returning customer is a big win for a business. Not only are they already acquainted with your company and offerings, but they have come back for more because they’ve seen the value in it.

Customers who keep coming back are the goal. 

Think of Apple. iPhone enthusiasts flock to Apple stores like moths to a flame every time they introduce a new model. MBLM’s 2020 Brand Intimacy COVID Study revealed that 55% of customers bought Apple products more during the pandemic. The tech company had record-high revenue for its September 2020 quarter. 

However, creating a loyal customer base like Apple’s starts with converting first-time customers into return customers. 

Who Is A Returning Customer?

A return customer is one who has bought a product or service from your business and comes back for more. Usually, businesses measure return customers over a period of time. Ideally, you want a customer to return within a year of initial purchase. 

Returning Customer


Once they have returned, you can work on making them repeat and loyal customers. Improving customer service, providing personalized recommendations, and an impeccable customer experience can help with this. 

Is There a Difference Between Returning and Repeat Customers?

From a business point of view, yes. 

A return customer is one who has made more than one purchase from your business. It could be a second or third purchase. While this is a good goal to work towards, with return customers, there is no guarantee of retention. They may or may not engage with your business in the long run. 

The real prize for businesses is to build a strong base of repeat customers. Repeat customers are brand loyalists. They engage and purchase from your business over and over again. These customers are most likely to stick with you in the long haul. Not just that, their customer loyalty is expected to bring in new customers through word-of-mouth recommendations. 

According to Deloitte, referrals lead to a 37% higher customer retention rate. Just think of the times Apple users have tried to convert non-enthusiasts. Every non-user has brushed shoulders with at least one loyalist pushing them to try the “Apple experience.” 

Every business should aspire to create experiences that turn returning customers into repeat customers. 

What About New Customers?

New customers who are about to make their first purchase are good for business. It is not uncommon for businesses to focus a bulk of their marketing efforts on customer acquisition. For instance, the average e-commerce store sets aside more than 80% of its marketing budget for customer acquisition. 

A steady flow of new customers can indeed help grow revenue and profits. A growing new customer base can also signal that your branding and marketing efforts are paying off. Seeking new customers through marketing, social media, and quality experience is crucial for most businesses to expand their target market.

Repeat Customer

Source: FirstPageSage

However, new customers can be a costly affair. Numerous studies show customer acquisition can cost anywhere between five to 25 times more than retaining your existing customers. 

On the other hand, returning customers already have a relationship with your business. A positive customer experience or great product value might have them back at your doorstep for a much lower cost. Some of the biggest corporate players get most of their profits from their existing customer base. 

A returning customer is easier to sell to, is more forgiving than a new customer, and has a higher chance of turning into a loyalist. The numbers back this strategy too. In his book Marketing Metrics, Professor Paul Farris noted that regular customers have a 60-70% chance of converting again. A study from Bain & Company showed that a 5% increase in customer retention could lead to a 25% surge in profits. Another found that the average repeat customer spends 67% more than first-time customers. The more returning customers you have, the lesser you will have to spend on your conversion tactics.

This is not to say that new customers are not valuable for business. However, when you look at the outcomes, focusing on customer retention has a higher payoff most of the time. 

Why is Measuring Return Customers All That Important?

If the numbers aren’t convincing enough, it might help to remember that a business is nothing without its customers. There is no way to grow and expand your business unless you have people who want your offerings. Customers are among the biggest assets for companies. 

Existing customers are necessary to acquire new customers. If your current customers are not satisfied with your products, you can be sure that your business is doing something wrong.

Moreover, customer retention forms the basis for measuring other essential growth metrics for the business. For instance, customer lifetime value, a KPI that shows how long a customer will stick around and how much they will spend on your products, is a key growth metric. It can help you create customer personas that can dictate your customer acquisition and growth strategies. 

Returning Customer


Returning customers are also necessary to calculate Net Promoter Score, a qualitative measure of how likely they are to recommend your business to friends and family. If customers do not want to buy from you themselves, they are unlikely to recommend you to others. 

Other metrics like churn rate, repeat purchase ratio, and loyalty rates are also dependent on customer retention. 

Ensure your customers return with these strategies

Given how profitable returning and repeat customers are, strategizing on how to grow this customer base should be a business priority. Here are four ways to keep first-time customers coming back to your business:

1.  Impress Customers on the First Visit

The power of first impressions cannot be understated. New York Times bestseller Malcolm Gladwell noted in his book Blink: The Power of Thinking Without Thinking that most people make buying decisions based on two-second impressions that trigger memories – images and feelings. 

Effective branding is an excellent way to get a first-time customer’s attention. Apart from that, a flawless customer experience from the get-go can make a lasting impression. Simple tricks like a warm and friendly greeting and readiness to help with any requests customers are easy ways to impress customers. 

2. Engage with Customers Even After They Are Gone

In a highly competitive marketplace, numerous businesses are vying for customer attention. Don’t let a customer forget you once they walk out the door or exit your website. Brand recall is a powerful way to retain customers. Continue to engage your customers via social media, email, and other personalized communication methods. Proactive messaging based on behavioural triggers can nudge first-time customers to return to your business. 

Even for long-standing repeat customers, sharing relevant information or offers can convince them to make a purchase sooner than planned. Keep your customer base informed about new product updates, discounts, and offers. When you give customers a reason to come back, you can improve customer retention without inflating costs too much. 

3. Get Started on a Loyalty Program

Loyalty cannot be cultivated overnight. Loyal customers are ones who not only see value in your business but also feel valued themselves. Collecting feedback through customer satisfaction surveys, feedback forms, or ratings and then acting on them can elevate the overall customer experience. 

Additionally, tiered loyalty programs can foster a feeling of esteem among customers. Think of the punching card that Starbucks provides. Customers are tempted to buy more coffee in anticipation of the free cuppa they get when their card is all punched out. According to Harvard Business Review, companies with vital loyalty programs see revenue growth 2.5 times faster than competitors and even create more shareholder value. Loyalty programs also improve customer engagement and experience. 

4. Provide Outstanding Customer Service 

One single poor customer experience can convince 1 in 3 people to abandon a brand, even if they previously loved it. This is why you need to train your customer service teams to provide consistently positive experiences to customers. Existing customers need to be treated at par with new customers, if not better. Investing in tools that will help your customer service agents provide quick and accurate responses to customers can help your business provide top-notch customer experiences. A messaging software like Freshchat can help you meet your customers where they’re at and knock customer service out of the park every time. 

Get the Most Out of Your Existing Customers

Return customers are the most effective way to improve your business’s relevance and profitability. When you focus on nurturing customer relationships, success will automatically follow. 

Sign up with Freshchat to woo your customers through proactive campaigns, intuitive automated texts, and super-quick responses.


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