Why Repeat Business Is the Only Business
We have a lot of options these days. For just about everything really. Where I live in the suburbs of Metro Vancouver, there are literally three major supermarkets within a five minute drive of my house, not to mention the several smaller “mom and pop” type markets and shops in the area too. If I’m looking to buy a loaf of bread, I’ve got plenty of options.
That’s just in the physical space. There are also a number of delivery services from several grocery stores, as well as services like Hello Fresh that deliver pre-portioned groceries for pre-set menus. We’ve got lots of options. As a result, all of these businesses are competing for my business, because it’s equally convenient (broadly speaking) for me to buy that loaf of bread from just about anyone.
What you’ll find in offline business, just as much as in online business, is that landing that first sale from a new customer is the greatest challenge that you will face. They need to learn to trust you. They need to learn that the products and services that you offer are worth their hard earned money and that you won’t rip them off. They need to know that you’ll really deliver the goods in exactly the way that you claim, offering precisely the value that you say you would.
And that’s hard.
But once you’ve got that foot in the door, once you’ve landed that first order, it’s infinitely easier to land a second order. And then a third. And a fourth. Repeat business is really going to be your bread and butter, because it requires a minimal amount of added effort from you compared to how hard you had to work to convert the customer the first time around.
The Write Relationship
Take my freelance writing business as a prime example of that. I have some clients who only approach me and are only interested in a one-off project. They might need to revamp all the web copy they have on their website. Other clients are looking for more of a long-term relationship, but their needs shift and wane over time, so eventually they may decide they no longer need my services. No harm. No foul.
But far and away the bread and butter of what I do are for clients who stick with me over the long haul. Even when the specifics of their circumstances change — I write primarily for the web, so that’s just par for the course — they keep me aboard, because I’ve already proven that I can do the job they need in the way they need at a rate that they’re already comfortable with paying.
Repeat business makes up the overwhelming majority of my income. Clients come and go, to be sure, but I still have three clients who signed on within the first year of me being in business. That includes John. This is some 13 years later. And these clients make up the lion’s share of my income too. If I relied on the one-off projects that come and go, I would be nowhere near the position I am today.
Landing a first sale is hard. Landing a second is easier. Landing the 15th is easiest.
Apple might have a hard time convincing someone to buy their first iPhone. Or their first Macbook. But once you’ve been hooked into the Apple ecosystem, it all comes piling on. If you’ve got an iPhone, it’s way easier to sell you an iPad. And an Apple TV. And some AirPods. And a HomePod. And a premium iCloud membership. The list goes on and on.
Welcome to Costco, I Love You
Perhaps one of the best examples of this phenomenon is Costco. It can be pretty hard to convince someone to buy a Costco membership. After all, why would I pay to shop somewhere when I can buy basically the same stuff everywhere else without a membership? That initial conversion can be a tremendous challenge for Costco, but once someone has that membership card in hand, they’ll start buying almost everything from there.
They’ll be sold on the convenient return policy, the exclusive products and bundles, the free samples and food court… people who love Costco swear by it, all because they bought a membership way back when.
As an online business, no matter what it is that you sell, understand that converting a customer for the first time is going to be difficult. But don’t let that first sale be limited to just a single transaction. Capture the customer information with your mailing list, social media, subscription services, or whatever other methodology you have.
Because once you’ve hooked them into your ecosystem, the subtle suggestion of another purchase can be all the enticement they need.