The Value of Returning Customers to a Service Business

Both in life and and in managing your service business, you probably spend a lot of time worrying about first impressions.

What if they don’t like our service? What if we say the wrong thing? And just like in the real world, these worries are usually unfounded. But they can also drive us to work harder, and look hard at how we can improve ourselves and our teams. Here is how you can leave a lasting impression, and encourage repeat business from your service customers.

Make the First Visit Count

Making a great first impression can be great for your service business: it means you are focused on pleasing new customers, and on listening to feedback to constantly improve . But the most successful businesses know that their most reliable cash flow comes from returning customers – and they have the data to prove it.

We’re going to use those stats to wow you into focussing on your returning customers. Your year-end statement will thank you.

It All Starts with the First Sale

Before a person can become a repeat customer of your service business, they have to… become a customer. You pull out all the stops to make that good impression we’ve talked about: that great customer service, the above-and-beyond attention, that expertise. But did you know that you can influence a person’s likelihood to return to your business by increasing the amount they spend on their service?

We don’t mean that you overcharge: we mean you employ those upselling and cross-selling tactics.

Big Spenders: The Best Spenders

Sum of All noted that those spending more on first-time purchases were nearly twice as likely to return to your business. When customers have a good experience, they are of course more likely to come back again.

Now combine that warm, bubbly feeling with the fact that they’ve made an investment in your business: they’ve asked you into their home to understand and solve a problem they’ve been having. So when you are working with new buyers, incentivize them with promotions and smart sales suggestions. Hopefully, you’ll be seeing them again soon.

Want to learn how Vonigo’s service software can help boost bookings and revenue, as well as save on admin costs? Book a free, private demo of Vonigo and we will show you. 

Don’t Get Stuck in a Discount Tornado

We know we just said that to entice your buyers with some kind of first-time incentive. Before you start designing first-purchase coupons, think about other ways that you could incentivize your customer.

Discounts are effective at making that initial sale – who doesn’t love a deal? – but they also set that initial commitment to your brand artificially low. Instead of offering discounts, try offering small upgrades, special service, or promotions to turn that initial sale into a returning customers.

Customers Who Return to Your Service Business Spend More

This is where we get into the “lifetime value” (LTV) of returning customers. First off: LTV refers to the amount of money a customer will spend on your business over your entire relationship.

If you can maintain a high average of LTV across your customers, you don’t just have a healthy bank account – returning customers on average spend 27% more than people who are on their first visit. You have a group of loyal customers who care about and recommend your business.

Recurring Revenue is Your Friend

Steady customers can help a service business weather their low seasons by simply showing up for their annual visit. They are the ones who are recommending your business on to friends, and liking your Facebook posts. LTV is more than just a dollar amount: it’s a community of customers.

Your returning customers aren’t just your most loyal: they are also a much easier sell. Because they are familiar with your service, your employees, and your work, the price of your services is less of a hurdle to clear. In fact, returning customers are already 60-70% of the way to saying “yes” to your service – before they have even selected it! So yes – work on your first impressions because attracting customers is important.

You can also think about spending a little more to acquire and retain the kind of customers that will keep your business going strong for years to come.

Put some work into those established relationships, because they are the ones that will see you through the winter.

Interested to learn how service business management software can help you make more sales and retain more repeat customers? Book a free, private demo of Vonigo and we will give you specific examples that apply to your business.