Sales

How Does Repeat Business Increase Your Sales Growth?

August 9, 2022
Erick Vargas

Repeat customers are essential to business growth in all the trades. Repeat business is highly profitable because it is inexpensive to acquire, doesn’t take a lot of time nurturing leads, and as a result will increase profitability.

This post is about reasons why repeat customers increase your growth and what you can do to persuade past clients to return.

Repeat Customers Spend More

Here are two important facts uncovered in surveys of small businesses:

*More than 50% of their annual revenues were generated from repeat customers

*Repeat customers spent 67% more than new customers

The data suggests that once customers trust you, they’ll hire you again, and use you for bigger projects.

They Are Easier to Sell To

Repeat customers that had a valuable experience after hiring your company are much easier to persuade to return for a second or third project. The data shows that customers that have had a successful outcome with a contractor are 60% to 70% more likely to use them in the future.

You can boost that number closer to 80% or 90% if you use an effective customer relationship management (CRM) tool to stay in touch, offer discount incentives and provide value to them in the form of gifts and useful information about your company or industry. CRM software is available that is tailored to the building trades – GCs, roofing, painting, concrete, electrical, plumbing, HVAC, cleaning, solar, etc.

Construction worker with clients, shaking hands

Return Customers Less Expensive To Acquire

Your marketing department spends time and money on generating new leads, and your sales team puts a lot of resources into converting those leads to sales. But on average, only about 20% of new leads will hire you. Overall, it costs 5 times more to gain a new customer than it does to keep a current customer.

The most sustainable way to improve your new business acquisition cost is through customer retention and repeat hires.

Repeat Customers Refer New Customers

Word-of-mouth is the most effective and cheapest marketing there is. If your current customers are pleased with the job you did for them, they will be happy to refer others to your company.

Develop a referral program providing incentives like free maintenance agreements, discounts on repeat projects or gift cards when current or previous customers send their friends, neighbors and relatives your way.

Make sure all of your clients are aware of your referral program from the first day they hire you. Remind them again when the job is complete, and use your continuing contact with them to keep your referral program and its benefits in their mind going forward.

How to Make Repeat Customers

Always hang on to your past job files and notes after a project is completed. You can include customer contact info and how they prefer to communicate (phone, text, email, etc.). What the job included, what they liked and even their birthdays, so you can send them a birthday greeting. Use these later to assist you in creating a repeat customer. Again, a quality customer relationship management, sometimes called lead nurturing, program is the most cost-effective way to do this.

Once a project is finished and the customer is pleased, your contact with the customer should not end. Maintaining contact and continuing to build the relationship is critical to creating repeat business.

Two people shaking hands at a work site

Maintain contact with your clients to remind them that you are still around and what you’re up to – how your company has improved and will be an even more valuable asset to them in the future. You can send them information on the latest projects your company has been involved with – maybe a few before and after pictures of recent projects that turned out exceptionally well. Or share an interesting article that pertains to the type of project you completed for them or that you know they’re interested in doing in the future.

Demonstrate that you continue to be innovative and a problem solver in your field and that you are an authoritative source of information in your niche.

Offer them an incentive like special pricing, an upgrade, or a bonus on a new project.

Always let them know if your construction company has expanded into new areas, added new products, or are providing additional services.

And don’t forget to ask:

Request that they follow your business on social media.

Ask for referrals – and offer an incentive for doing so.

Your goal is to further the trust the client has in you and position your company as an expert in your field.

The Construction Business is Built on Client Retention

Repeat customers are the necessary support system that keeps a business running and provides short-term potential to increase your revenue with low sales costs.

Here’s a thought: It’s possible for up to 80% of future profits to come from repeat purchasers, so strengthening your existing relationships will increase your revenue and grow your company.

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