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Bravo Hack – How to Market to Repeat Customers to Grow
The best companies in the world all have something in common. They understand the value of repeat customers and have a strategy to support existing customers.
Increasing your store’s profitability begins with the customers you already have, which is why focusing on customer retention should be an area of focus in 2021.
First, we’ll discuss the three reasons repeat customers are profitable. Then, we will share three ways Bravo empowers businesses to focus on Customer Experience, thus translating to more repeat customers.
THREE REASONS REPEAT CUSTOMERS ARE MORE PROFITABLE:
A REPEAT CUSTOMER IS MORE LIKELY TO SHOP WITH YOU
A repeat customer is defined by somebody who makes at least two purchases with you. As a pawnbroker or buy/sell store, this definition extends to somebody who has made at least two loans with you or somebody who has sold two items to you. Once a customer visits your store and transacts with you at least two times, the chance of them continuing to do business with you nearly doubles. In fact, after one purchase, a customer has a 27% chance of returning to your store. While that isn’t a horrible number, relying on this return rate to boost your store’s profitability isn’t a good strategy. However, if a customer comes back a second or third time, the percentage for coming back to your store jumps to 54%.
REPEAT CUSTOMERS ARE EASIER TO SELL TO AND SPEND MORE ON EACH PURCHASE
Cost of acquisition or Cost to Acquire a Customer (CAC) is tied to your ability to get the deal done when the customer walks through your doors. This is called a conversion. The more a customer does business with your store, the better your CAC. This translates to better profitability.
The more repeat customer you attract, the less you have to rely on new business walking through your doors (or visiting your online store). In fact, a repeat customer has a 60% to 70% chance of converting. Not only does conversion increase, so does the dollar amount of the transaction.
This is true for sales as well as loans and buys. A repeat loan or buy customer rarely brings their most valuable item first. Customers are weary and want to build rapport and trust before bringing family heirlooms or high-dollar merchandise into your store. On the retail side, your loyal top 10% spend three times more per order, and your top 1% of customers spend 5 times more.
REPEAT CUSTOMERS ARE WORD OF MOUTH REFERRALS
The importance of online reviews, like Google, Facebook, Yelp, and City Search, is just the tip of the iceberg. Word of mouth referrals is the most powerful form of advertising. A repeat customer gives your store more word of mouth business than a first-time customer. According to Bain & Company, the amount of people a customer refers to your business increases and correlates with the number of times they have transacted with you.
TECHNOLOGY MUST SUPPORT DRIVING AN INCREASE REPEAT CUSTOMERS
In 2016, I attended twelve conferences. Eight of these were pawn conventions – regional, national, and international. The other four were focused on Customer Experience, Software as a Service (SaaS), and Customer Service. The biggest tech companies, the ones I idolized, were shifting their focus from Customer Service to Customer Experience.
Customer Experience refers to the 360* experience a customer has with your brand. It goes beyond saying hi when a customer walks through your doors. It expands to how a customer experiences your brand online, via mobile, and in person. The greatest companies, including eCom, retail, and tech, hyper–focus on Customer Experience because it translates to repeat business. This means more profit.
Bravo’s mission is to be the catalyst for the advancement of the communities we serve, and in 2016, we recognized that we had to find ways to help pawnbrokers launch Customer Experience initiatives with no extra effort. The only way to compete against Amazon, eBay, Walmart, First Cash, and EZ Pawn, is to nail it.
Customer Experience is a discussion in every product or feature we release, and most of our products were designed and created specifically to help you retain customers – Mobile Messenger, MobilePawn, Chat, Customer Loyalty Loan Bump, Customer Ad Hoc, Contact History, Buya, Company Branded, and more.
Let’s dive into three simple ways you can start executing a Customer Retention strategy with minimal effort.
1. CUSTOMER AD HOC:
Ad Hoc is one of the most underutilized tools in Bravo yet it’s one of the most powerful. Customer Ad Hoc gives you the ability to slice and dice your customer data so that you can encourage repeat loans, buys, and sales. It is perfect for segmenting based on behavior, gender, birthday, zip code, and dollars transacted.
The best criteria to use are:
- Transacted Between
- First Time In
- Loan Activity
- Buy Activity
- Retail Activity
- Loan Amount
- Buy Amount
- Retail Amount
One of the things I love about segmenting data is that you can try new campaigns without much risk. From here, you can text, email, or push notify your repeat customers about sales, promotions, and exclusive events. My favorite kind of message to support growing repeat business is to simply say “Thank You!”
If you’re struggling coming up with ideas, messages, campaigns, or segments, Bravo launched a Concierge program where we will help you execute on your initiative. We do this for free and have loved hearing how successful these campaigns are.
The biggest fear around providing customers a convenient mobile application is If a customer can help themselves on mobile, they won’t come into my store as much. If this sounds like a concern you have, you aren’t alone. But did you know that customers who have downloaded Walmart’s mobile app are 2.5x more likely to visit stores? It is the same story for customers who download MobilePawn.
If that isn’t impressive enough, here are some jaw-dropping data that shows how MobilePawn drives repeat customers and more profit. Pawnbrokers with MobilePawn:
- Wrote 5x more loans
- Lent 5x more dollars
- Collected 7+x more pawn service charges
- Took 11x more loan payments
- Saw a 50% higher redemption rate
- Have 3% less forfeitures
- Wrote 8+x more layaways
- Sold 8x more dollars in layaways
If you don’t already have a Mobile strategy, you aren’t fully executing on Customer Experience and Customer Retention.
3. AUTOMATED CAMPAIGNS:
The best kind of campaign is one that is completely automated and yields more brand loyalty and customer retention. The top four that I highly recommend are:
- Birthday Campaign: Set up an automated campaign that offers your customers a discount or special birthday promotion. Set the campaign to run the day of your customer’s birthday. You only have to set this up one time in Bravo, we will handle the rest.
- Store Anniversary Campaign: There is nothing like telling your customer how thankful you are that they do business with you. Celebrate their first time doing a transaction with your business. Like the birthday campaign, once you set this up, you never have to take action on store anniversary sales every again.
- Loan Courtesy Reminder: The number one reason customers forget to make a payment is that they simply forgot. Like you, your customers lead busy lives and their due date simply slips their minds. Courtesy loan reminders are about keeping your customers happy, informed, and loyal. You can set these up to be recurring to ensure they remember.
- Layaway Courtesy Reminders: Like loans, the number one reason customers forfeit their layaways is that they forgot. You can also set up layaway courtesy reminders to be recurring, and you can “set it and forget it”. As a side note, the number one reason customers don’t like to put things on layaway is that making payments is a pain. MobilePawn solves this entirely hence the “8x more layaways written” data shown above.
If you don’t have a strategy around driving repeat business, you are missing out on huge profits. Technology is or should be designed around helping you execute on Customer Experience so that you can excel in loyalty, repeat business, and customer retention.
Since 2016, Bravo has been hyper-focused on providing tools to help small businesses compete with the biggest retailers and eTailers. The lowest hanging fruit is Ad Hoc, MobilePawn, and Automated Campaigns. Lean on these tools and our free Customer Concierge to help you reach your 2021 goals.