2 replies to this topic

[Black_Knight]

By the very nature of discussion forums, we often find ourselves focusing on the innovative and new over the tried and tested. We run the risk of misleading fresh starters sometimes by talking about only the new and exciting, and sometimes dismissing mentioning the 'basic foundation' type of techniques.

I wanted to be sure that one place we did not allow this to happen was in targeting the most important and valuable driver of sales to any business - the previous experience. Almost any business should always be aiming and expecting to retain its customer base. To create customer relationships that go beyond one single sale.

Indeed, certainly within two years of business, one would hope that the majority of sales were coming from existing customers, happily returning. Of course, only you will know what the consumption cycle is for products or services of the type you deal with. But you would certainly hope that each sale you make would lead to at least one recommendation to a friend, and to repeat business from each customer.

That all means that within a few cycles of buying, the sales you gain from repeat business should be one of the largest drivers of sales you have. For sure, any 'news' or 'ezine' type site should be gaining a big majority of its traffic from regular readers. 80% minimum I'd say was a good benchmark.

So, lets get some discussion going here with a few questions:

1st - Are you measuring and managing your customer base to guage repeat business? (If so, how? If not, why not?)

2nd - What percentage of all customers becoming repeat customers do you consider a reasonable 'benchmark' of customer satisfaction for your business type?

3rd - What reasons other than disatisfaction might prevent a customer returning to you when it is time to replace what they bought from you before, and are there ways to mitigate these factors?

[A.N.Onym]

Those are excellent points, Ammon.

I'd sign under any of the ideas in the post, too.

Unfortunately, I can only provide the answer to the first question.
Though I don't have a customer base yet, I am going to track how many customers referred how many visitors or clients to our site. Partly by asking our clients 'How did you find us?', partly from discussions with our current or future clients. Perhaps if we create a discount referral system, we'll be able to track this much more easily.

Why? One of the essential assets of having a business is customer relationship. If we build good relationship, we'd expect our clients refer their friends or relatives or anyone to our site. So, in this case, return customers are a sign of good customer relationship, product quality, etc.

As far as the 'benchmark' of customers, it's fairly hard to judge without a customer base. I need to see a real figure for our business to be able to comment on it.

Thanks for inspiring an interesting discussion!

Edited by A.N.Onym, 26 April 2006 - 01:04 AM.

[eKstreme]

100% agree. The first point that jumped at me is the "80% repeat customers" benchmark. Certainly in strategy/management consulting, the number most of them quote for repeat customers is 80%-90%. Although that sounds high, it's the best sign of satisfaction. Of course, this changes a lot in your marketing plan: attracting new customers is different from keeping your customers.

Another point is "turning customers into sales people" is one idea that's championed by Seth Godin, the famous marketer. He calls it flipping the funnel and has written a free ebook about it.

To finish off this "what Seth said" post, he gave a talk at Google. He explains in very simple terms what marketing is really about. It's called "All Marketers are Liars"