How to Turn First-Time Buyers into Repeat Customers

Making a sale to a first-time customer can be an exciting experience as a small business owner, as it’s an opportunity for someone new to learn about who you are and what your business has to offer. However, now comes the potentially challenging part: how can you increase the likelihood that this customer will return in the future? Is it something you should do before they make a purchase, or should it happen afterward?

To help answer these questions, we’ve outlined several strategies to strengthen your customer retention strategies, turning first-time customers into loyal, long-term buyers of your small business.

But first, why is it important to have a customer retention strategy?

A customer retention strategy, which can include the tactics used to engage with existing customers to maintain loyalty, offers several benefits for small business owners. One key advantage is that repeat customers lead to repeat sales. Studies show that current customers spend, on average, 67% more than new customers. Having repeat customers also provides some peace of mind, as they provide a steady stream of revenue, which is crucial for any business owner.

What is your current customer retention rate?

Determining your customer retention rate (CRR), which is the percentage of customers who have stayed with your business over a certain period, can provide key insight into your current strategy and whether you should look to improve it, as a high CRR can mean more sustainable revenue. For reference, a good CRR is between 70-80%, and the higher you go, the more beneficial it can be for your business. Keep in mind that an ideal CRR will depend on the industry you are in—retail, for example, is typically between 50-70%.

To discover your CRR, you can use this formula outlined by the Business Development Bank of Canada.

Maintain quality customer service

A new customer’s first impression of your small business can be made up of several factors—it could be partly formed by looking at your website and social media, from the reviews they’ve read online, the experiences their friends told them, and so on. However, part of that impression will be formed when they actually engage with your business for the first time.

According to a report that surveyed almost 17,000 customers worldwide, 86% of consumers said the experience a company provides them is just as important as the products/services it offers. Additionally, 41% of Canadians say that a poor customer experience will result in them purchasing from a different brand, while 16% will pay more for a great customer experience.

Meanwhile, U.S. findings indicate that 65% of customers have determined that a positive brand experience is more influential than great advertising, and 59% will stop engaging with a company after multiple bad experiences (17% after just one).

Providing a positive customer experience can often depend on the type of small business you have. However, offering a personalized experience is often a universal factor of a good encounter. In a survey on customer experience, 74% of respondents said personalization was key in brand connection, noting feeling appreciated and understood as key components. Additionally, 64% said they’d rather purchase a product from a brand that knows them.

But what does personalization mean in a business? It has been found that 72% expect a business they purchase from to recognize them as individuals and know their interests, and when asked to define personalization, consumers relate it to positive experiences that make them feel special. For some small businesses, this could mean remembering their name or talking about their last order—whatever makes the experience feel more than an anonymous transaction.

By offering this type of experience, trust can form over time, which is important because consumers will spend an average of 51% more when they trust a retailer. Similarly, a report by Adobe found that 61% will recommend a brand they trust to friends, and 41% will join a loyalty program because of it.

If you and your team can provide all customers (first-time or repeat) with a positive, personalized experience, you can set the stage for long-term customer relationships. Find what works for you and review customer feedback to determine your next steps.

Offer a loyalty/rewards program and exclusive offers

One way to entice a first-time customer to return to your small business is by encouraging them to join a loyalty program at the time of their purchase. If you don’t already have a program in place, consider what would work best for your products or services and what would benefit your customers.

For instance, you could implement something as simple as a punch card system, where customers receive a free item after a certain number of visits, or create a more detailed membership program that offers a discount on every purchase. You may even consider offering special offers strictly for first-time customers, helping increase the odds of future purchases.

Research shows that seven out of ten consumers view loyalty programs as a significant factor in deciding which brands to frequent. The same number of consumers say they’ll join a loyalty program before making their first purchase, with three-quarters indicating they’ll spend more as loyalty members.

If it fits your business model, you might also consider offering a paid membership option. This would require customers to pay a monthly or annual fee in exchange for exclusive perks. According to a recent survey by Deloitte, almost half of those without a paid membership are willing to pay more if a brand offers the “right value.”

The key to a successful loyalty program is to make sure that the rewards are valuable enough to keep customers engaged. Think about what could enhance your current customers’ experience and implement the options that make the most sense for your small business.

Follow up after their purchase

Post-purchase emails are an excellent way to “keep the conversation going” with your customer and encourage more engagement. In fact, these types of emails receive a 217% higher open rate, 500% higher click rate, and 90% higher revenue per recipient when compared to an average email campaign.

Within these follow-ups, consider including additional items that the customer might be interested in based on their recent purchase, as cross-selling can increase sales by 20%. You could also offer a discount code for their next purchase—whatever best suits your small business. To make the message more personal, include a short note in your post-purchase email that addresses the customer by name and thanks them for their order.

If you own a brick-and-mortar store, ask first-time customers for their email addresses. If they agree, it creates an excellent opportunity to maintain communication and grants you the opportunity to reach out with news about your business, potential discounts, care instructions, and more.

Add personal touches to their order

From custom-branded packaging to a personalized note card, going above what they may expect when they open their order can help add to a positive experience, especially if you are an online business. For example, a personalized printed thank you card can be a great way to show appreciation for their purchase. Additionally, adding your business card to a first-time customer’s order can act as a mini billboard and help keep your small business at the forefront of their mind.

See how The UPS Store can help with our in-store and online printing services!

Set your small business up for success with The UPS Store

If you’re ready to elevate your small business and impress both new and existing customers, discover how The UPS Store’s Small Business Solutions can help. Find a nearby location today to get started.