Repeat Customer vs. New Customer: Which is Better?

Establishing a quality customer base is what builds revenue and grows your company. Depending on how busy you are or the time of year, this can often mean you’re juggling marketing efforts.

Finding the balance between attracting new customers and retaining repeat customers is challenging. Both types of customers benefit your business in different ways.

Marketing campaigns are time-consuming, take financial investment, and require your attention. That can make it hard to decide where to focus your efforts. So, how do you decide what to invest in? Do you focus on retaining repeat customers or on bringing in new ones?

Let’s take a look at the pros and cons of new customers versus repeat customers.

Understanding Your Customer Base

Your customers are the driving force behind your successful business. A repeat customer has previously used your services. They continue to return to your company for their home service needs.

A new customer is just what it sounds like – a new client that has hired your business for the first time.

Repeat customers and new customers both provide income. Both are important to your revenue stream. So, how do you know what the right marketing approach is?

Understanding your market can help with this. Data can show what services are being requested. It will also show how often customers are returning for them. You can focus your marketing efforts when you’re familiar with your customer base.

Your business strategy should focus on who will bring in more business. This could be new customers, repeat customers, or a mix of both. A targeted strategy can lead to company growth and sustainable revenue.

The Case for Repeat Customers

Repeat customers offer your business a variety of benefits. Loyal customers tend to trust your services and provide consistent business. Not only that, but they can also help with marketing and customer acquisition.

Over 90% of customers trust recommendations from friends and family over other types of marketing.

Acquiring new business can cost up to 10 times more than retaining current customers. Returning customers save you money. They’re also bringing in more revenue. On average, repeat customers spend 67% more than new customers.

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The Allure of New Customers

Repeat customers may seem like the obvious choice. However, let’s not forget that they were once new customers. Creating new customer relationships helps expand your business. It opens the door for you to tap into new markets.

Diversifying your customer base can open the door to new opportunities. This allows home service providers the chance to build revenue and reach a new client pool.

Plus, a new customer has the potential to turn into a long-lasting, repeat customer.

Balancing Both for Optimum Growth

Finding the balance between customer retention and customer acquisition is the sweet spot. Your business needs both customer loyalty and new clientele to be successful. Both customer relationships provide high value to your company.

Maintaining customer relationships isn’t always the easiest. Over 70% of consumers leave for a competitor after poor interactions with a company. And, unfortunately, half will leave after just one negative interaction.

To nurture both relationships, focus on providing the top services in the area. If the quality is top tier from the beginning, 81% of customers will consider returning.

Additionally, business owners should establish customer retention plans. Defined customer relationship management and marketing techniques can help focus your efforts.

How You Can Start Nurturing Both New and Repeat Customers Right Now

Every customer is as valuable as the next. One might save you money. Another might open up opportunities with a whole new market. Establishing customer relationship strategies can help you gain business from both client bases.

Here are some tips and tricks for bringing in business from both new and repeat customers:

Use Email Marketing for New Customers.

There is a reason that 64% of small businesses use email marketing to reach customers. Email marketing is an effective and direct way to reach potential clients.

Business owners can use it to target new demographics. It makes their brand and services visible. Almost 90% of brands say that email marketing is critical to business success.

Email marketing can promote specific services. You can share your brand’s story. You might offer special promotions. Software can even automate emails, which makes it easy to use and a great tool for finding new customers.

Offer a Loyalty Program for Existing Customers.

Business owners could offer a loyalty or rewards program to returning customers. Over 90% of companies that offer a rewards program have a positive ROI.

Testimonials target both new and returning customers. They also promote the value of the customer and increase trust with potential clients. Showcasing positive reviews is a great way to build credibility.

You could offer discounts to customers who use your services several times. Or you might offer priority scheduling and extended warranties on your services.

Everyone loves a good perk. They can draw in new customers and keep loyal clients coming back.

Run Targeted Advertisements.

Running paid advertisements is a tried-and-true way to attract new customers. Platforms like Google Ads and Facebook (aka Meta) ads provide highly personalized advertising services.

They allow businesses to target demographics based on age, location, interests, and keywords. Targeting puts your ad in front of the audience most likely to need your services.

Ask Your Clients for a Testimonial.

Asking for testimonials targets both new and returning customers. Testimonials promote the value of the customer and can increase trust with potential clients. Showcasing positive reviews is a great way to build credibility within your community.

Customer feedback is also a great way to improve your services and meet the needs of your community.

FROM ONE OF OUR PARTNERS: 5 Ways To Quickly Boost Your Customer Feedback Strategy

Send Out Automated Messages.

Most Customer Relationship Management (CRM) software provides automated messaging. This function can be used to send out little thank-yous and service reminders. Over 90% of customers express a desire to receive text message updates.

Meeting customers where they are elevates your customer service. It makes the process easier for your clients. Messaging is a great service. It’s easy to manage and can promote new services or request feedback.

Maintain High-Quality Services.

Ultimately, the quality of your services will make or break a client relationship. Whether you’re providing HVAC, plumbing, electrical, or cleaning services, your customers will expect a job well done.

Providing a high-end customer experience will benefit all of your clients. Quality services will keep your schedule full and your revenue growing.