Attracting new customers is essential in today's competitive business landscape, but the real key to sustainable success lies in customer retention. Converting a one-time buyer into a loyal repeat customer not only generates steady revenue but also builds brand advocates who can drive growth through positive word-of-mouth.
Who exactly is a one-time buyer? A one-time buyer refers to a customer who makes a single purchase from a business and does not return for additional transactions. They may provide a short-term boost in sales, but the real value lies in transforming them into loyal customers.
What is customer loyalty? It signifies the strong affinity shown by customers who make regular purchases from the same brand or business over an extended period. Building and maintaining customer loyalty is a critical long-term business plan for companies in Indonesia. Here's why:
Acquiring new customers can be expensive due to advertising and marketing expenses. It actually costs a whopping five times more to attract a new customer than to keep an existing one, according to Invesp. Converting existing customers into loyal ones is definitely more cost-effective for businesses.
Besides lowering customer acquisition costs, loyal customers tend to have a higher Customer Lifetime Value (CLV). CLV is a vital metric that measures the total expected spending of a customer throughout their entire relationship with a company.
For example, a customer in the skincare and beauty industry spends around $250 per year with a brand, starting at 25 years old and continuing until 60 years old. The average customer would contribute $8,750 in total spending over their lifetime.
However, certain factors can significantly impact CLV. For instance, customers who engage with the brand by subscribing to their email newsletter may increase their annual spending to $600, resulting in a significantly higher CLV of $21,000. Conversely, a negative experience, such as a problematic product shipment, may lead customers to abandon the brand prematurely, diminishing their CLV.
As you can see, loyal customers have a higher CLV as they tend to make more frequent or even higher-value purchases over time.
Loyal customers are also more likely to share their positive experiences with friends and family, acting as brand advocates and driving organic growth. Each happy customer becomes a catalyst for expanding the customer base through their positive recommendations, significantly impacting the growth and success of a business.
In fact, satisfied customers recommend a brand to around eleven individuals on average. When multiplied by thousands of customers, it becomes evident that there is immense potential for customer acquisition.
Lastly, loyal customers offer a stable and predictable revenue stream, reducing the reliance on costly marketing campaigns to attract new customers.
Compared to one-time buyers who may make a single purchase and not return, loyal customers consistently engage with the brand and make repeat purchases over an extended period. Businesses can then focus on nurturing and retaining their existing customer base instead. This shift allows for more efficient resource allocation, resulting in reduced marketing expenses and higher profitability.
Getting and keeping loyal customers goes beyond providing great customer service. It involves understanding consumer behaviour and developing tailored strategies to meet their needs and expectations. Let's explore five methods of attracting customers and retaining their loyalty.
From the get-go, businesses must offer various payment options to accommodate different customer preferences in this digital age. Besides traditional methods, consider digital wallets, instalment plans, and buy-now-pay-later options.
Next, implement a robust loyalty programme that rewards customers for their repeat purchases. Types of programmes for both small and big businesses include offering points, discounts, or exclusive perks for loyal customers. The more they buy, the more they earn, incentivising them to continue shopping with your business.
Also, consider utilising customer data to create personalised shopping experiences. For example, businesses in Indonesia can recommend products based on their purchase history and preferences, address consumers by their names in communications, and tailor promotions to match their interests.
The job continues even after the customer purchases your products or services. Businesses can consider engaging with customers after their purchase to express gratitude and gather feedback. Use emails, send personalised thank-you notes, or do follow-up calls to ensure they had a positive experience and address any concerns promptly.
This is another one of the most overlooked strategies besides post-purchase communication. Streamlining your business’ shipping process can greatly improve the customer’s purchase experience. For example, offer flexible delivery, expedited shipping or free shipping. Once the product is shipped out, allow easy tracking of orders and provide hassle-free returns or exchanges.
DHL Express Indonesia, a global leader in logistics and express shipping services, can be a valuable partner in ensuring timely and secure deliveries for businesses in Indonesia and beyond. We offer a range of shipping solutions tailored to your company’s unique needs, including same-day and next-day delivery.
Partner with a trusted logistics provider like DHL Express to further enhance your consumers’ experience and set your business on a path to excellence in customer retention. Open a business account with us today!