The Undisputable Value of Repeat Customers…And The Proof to Back it Up

According to Forbes, “There’s a misconception in retail that you need to gain new customers all the time when in reality, repeat customers are what any business should aim for.”

We’re not suggesting that finding new customers should be dropped from your marketing strategy altogether. But statistics continue to show that repeat customers are more likely to yield increased revenue and long-term success.

Here’s the proof from customer loyalty experts, Fivestars:

  • 61% of SMB’s report that more than half of their revenue comes from repeat customers, rather than new business.
  • On average, loyal customers are worth up to 10 times as much as their first purchase.
  • It can cost 5 times more to acquire new customers than it does to keep current ones.
  • A 5% increase in customer retention can increase a company’s profitability by 75%.
  • 82% of companies agree that retention is cheaper to execute than acquisition.
  • The average repeat customer spends 67% more in 31-36 months with a business than 0-6 months.
  • A 2% increase in retention has the same effect as decreasing costs by 10%.
  • Customers are 77% more likely to buy a new product when learning about it from family and friends.

As you can see, “…repeat customers are moneymakers.” That’s the word from Fivestars, who also points out that satisfied customers contribute 14 times more revenue to your business than a dissatisfied customer.

Fivestars offers 5 suggestions on how to make sure your customers stay satisfied…so they’ll keep coming back:

  1. Fair prices

Research suggests that up to 38% of a customer’s satisfaction is tied to price fairness, according to the Journal of Finance and Economics. If your product is more expensive than your competitor’s price, explain why they’re paying a little more and what they’re getting for it.

  1. More Promotions / Deals

Marketing Sherpa cites research indicating that 28% of customers want more deals in their inbox, 29% want more personalized deals. You can send deals via Email, text message, or advertise via social media. The key is to offer deals that are targeted (based on past purchases, for example).

  1. Communication

Customers want to hear from you. Research shows that customers want to receive helpful advice and business updates, whether it’s a newsletter, an article, or an email with a link to a blog post.

  1. Feedback

On average, unhappy customers tell 9 to 15 people about their bad experience. Just because they aren’t telling YOU about it doesn’t mean they aren’t vocal with others. Offer convenient channels for customers to tell you what they’re thinking and how they’re feeling about your goods and services.

  1. Appearance matters

Customers will judge your business based on it’s cleanliness and the employees who work there. If your shelves are cluttered or there are piles of unfolded clothing strewn about your retail space, with messy employees manning your checkout stations, customers will not be encouraged to return. Pay close attention to your store’s appearance and have rules in place for workplace cleanliness and employee dress codes.


Author, scientist and management consultant, W. Edwards Deming, once said, “Profit in business comes from repeat customers…” And there’s certainly plenty of research to back up his statement.

While acquiring new customers should still be included in your marketing game plan, the reality is that new customers aren’t as profitable as repeat customers.

That’s why it’s so important to evaluate how your business interacts with customers and to implement strategies (like the ones above) that will lure current customers back to your store.

Source for Statistics:

Sherene Funk is the author of the contemporary romance Autumn in Your Arms and two small business e-books. She is a voracious reader who owns more books than she can ever read in this lifetime. A graduate of Brigham Young University, she worked in advertising for many years before moving to her current writing position at Rain Retail Software. She researches non-stop to see what successful retailers do and loves to share what she learns with small business owners.