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Q&A - What is repeat business and why is it important?

Jim Riley

1st May 2009

Getting a profitable customer to buy from a business for the first time is often difficult and expensive. The key to a successful business is to persuade that customer to buy again, and again. That is what is meant by repeat business.

However, many businesses focus on amassing new customers and making more sales from them. They will try anything to land a new customer, including making promises they cannot keep or offering more than they can afford. Even when tactics like these do work, the customer will usually leave for a different business when they see the true nature of who they are dealing with!

Imagine you gain a new customer. Great! However, it is the second (or repeat) sale that a customer gives you that is so important. This is because it shows that the customer is happy with your business and wants to continue trading with you. Any customer that returns for more is known as a repeat customer, and it is often said that it is five to ten times cheaper to keep a customer than to get a new one.

What methods are available to a business to encourage repeat business? Here are some ideas that usually work:

• Regularly remind them of the business – send an email, a postcard or a catalogue periodically
• Treat repeat customers like they are special (they are!). Offer repeat or regular customers special offers, exclusive deals or other promotional incentives.
• Pick up the phone, or jump in the car, and contact them. A visit or phone call can generate new sales and help a business obtain useful information on customer needs
• Make ordering and delivery as easy and efficient as possible

Jim Riley

Jim co-founded tutor2u alongside his twin brother Geoff! Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs.

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