Turning New Customers Into Repeat Customers

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Last week I walked into a local coffee house near my place…

As I left, it sort of blew my mind how utterly clueless these guys were when it comes to marketing and building customer loyalty. There are about 10 other choices in the same area – they thanked me and that was that.

Why would I come back?

They had no idea who I was. No email. No phone number. No way to market to me going forward.

And why not introduce me to their loyalty program? Is there one?  

So I went back in and asked…

“Out of curiosity, are most of your customers regulars or just one-offs?”

Their answer – “I think we have a lot regulars. I’m really not sure.”

Mind. Blown.

How does a small business not know their customers? Imagine if they had a simple strategy to earn repeat business.

converting One-Time Customers Into Regulars

I like this coffee house, it happens to be my favorite. I was bothered by them not know their customers ( me ) and went home and put together a simple email marketing and loyalty strategy for them.

The next day, I sent them a free plan to get the email address of every single customer that comes through their door and to convert more of them into loyal, repeat customers.

Here’s what a new customer gets now:

  1. The next day, a simple email including a quick how to on brewing better coffee at home. That’s it
  2. The following week, a just checking in email with some research on the health benefits of coffee.
  3. One week after email two, introduce their loyalty program, which is pretty cool!

A customer Loyalty Programs That Actually Works…

I proposed that the coffee house structure their loyalty program as follows:

If their customers joined their loyalty program, they’ll get a limited time loyalty card that works like this:

For every 10 coffee purchases, they get one free. Nothing special here.

But – let’s throw in the enabler!

To get people to come in right away,  the coffee house will punch their card three times – once for their initial visit, and twice for today! So if a customer comes in today and gets their loyalty card – they’ll get three coffee credits.

So now it’s seven coffees to get your next one free.

This works because of the Artificial Advancement model that Xavier Dreze and Joseph Nunes came up with during some customer loyalty research in 2006.

Basically, by providing customers with an advancement on their rewards, they are over 80% more likely to become loyal, repeat customers.

We’re using psychology in our marketing to advance customers into the loyalty stage. Rather than starting your loyalty program at 10% ( 1 of 10 punches ), your customers get a 30% advance – giving them a real reason and motivation to come back sooner.

It’s such a simple step to take, and in the coffee house example, only took 3 simple emails to get a new, loyal coffee customer.

How to apply this to your business

It’s so simple to get an email and just follow-up with your customers. Getting started is the key, and if you’re not adding your customers into your email list – start there, then follow up!

Provide your customers with value vs marketing. Let them know why they’ve made a good decision to do business with you and encourage them to do more.

Hack your way to more sales

Running a business is hard. It’s more than full-time, but it’s what you chose to do. Make your product and your service the best it can be for your customers – then market relentlessly.