Have you ever thought about the impact from “Repeat Customer Orders” to your business?

Prime focus of majority of businesses is on generating revenue. The universal truth of attracting a customer to purchase your product or to obtain your service is based on main three factors. First and foremost reason is the Product / Service solution. What problem of theirs you solve, how important that problem is to them and how you resolve it. Second point is your Value Preposition; this refers to the value addition you pass on to your client in return to their time and investment. Third factor is the Service; this has an emotional element and depends on how well you create a memory and a positive experience in the minds of your customer.

When generating revenue it is important to focus on repeat customer orders. Having a clear idea on the impact of repeat customer orders can help you to devise strategies to increase revenue. This article explains the importance of repeat customer orders to your business strategy on following areas;

1. Cost Vs Return
2. Easy to Sell
3. Promoting Business
4. Customer Loyalty

1. Cost Vs Return

The effort and time taken to attract a new customer incurs a significant cost to your company compared to a repeat order. When a new client visits you with the mindset to purchase your product for the first time; make sure you have enough strategies in place to build trust. This will convert them to repeat customers.

At the same time, it is important to note that repeat customers spend more time and money in selecting and purchasing your products as opposed to new customers. According to research reports repeat customers spend 67% more than new customers when purchasing a product/service.

2. Easy to sell

When you have a data base of repeat customers already built; your new products and services should be offered to them first. Since you have already built trust based on your previous experience, they will definitely try your new products and services. You do not have to waste too much time and resources on potential customers who may end up not buying anything. Ensure you are paying enough attention to your existing customers and putting efforts into your customer retention.

3. Repeat customers means it’s a way to promote your business

Organisations invest significant amount of resources in promoting their business in various manner. However, business owners sometimes forget that their repeat customers are a free source of promoting their business. It’s their word of mouth which is more convincing and promising to attract a new client. If we quote an example, there are number of boutique hotels involved in eco-tourism around the world. They do their promotional activities only at the start-up level. They invest their time and efforts heavily in servicing and creating an unforgettable experience in their customer’s minds. This results in continuous repeat orders and new clients through word of mouth.

4. Customer Loyalty means long-term client retention

Loyal customer will stay together with a business in the long term. They will always have a cautious eye towards new product releases and growth of the company. This is a costless return a business owner can earn after servicing a client to their utmost satisfaction.

Eventually, it is important to understand how important repeat orders are to your organisation and invest your time and effort in increasing repeat orders.

Written by Nara, ACMA, CGMA (CIMA-UK), MBA (ICFAI University). Nara is a Commercial Accountant at SandS Australia. She has 15 years of experience in business, finance and accounting in senior managerial roles helping analyse, identify, and drive business growth

Edited by Sam Mansoor. Chartered Management Accountant, CPA, Chartered Global Management Accountant, Dip. Equity Trading. He has over 30 years’ experience helping businesses achieve immediate and long-term success.

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