How to Convert New Clients into Returning Customers

How to Convert New Clients into Returning Customers

Getting new customers costs six to seven times more than retaining current customers. That’s one reason why converting new clients into returning customers is so crucial. But how do you consistently encourage repeat business?

Let’s discuss some of the most common ways to convert new clients into returning customers.

Why You Should Focus on Retaining Customers

In addition to the costs associated with bringing in new customers, there are other benefits to retaining existing customers.

  • Returning customers spend around twice as much as new customers
  • Existing customers are up to 10 times as likely to make a purchase compared to new customers
  • A 2% increase in client retention equates to a 10% reduction in costs
  • A 5% decrease in customer loss can increase profits by as much as 95%

As you can see, keeping existing clients is an essential part of having a thriving business. While marketing to attract new customers is important, retaining existing customers is crucial.


Do you know that greasy spoon diner around the corner that’s been open for 50 years? It probably isn’t because of the food. It’s usually because of the service.

One bad service experience can lead a customer to leave negative reviews and warn everyone they know to stay away. On the other hand, exceptional service can maintain loyal customers even if they have an occasional problem with your product.

You may be having a bad day, but your customers should never know that. Each and every customer should feel special, no matter how much you need to “fake it.”

One way to expand excellent service is to get the email address or phone number of every customer. Follow up the day after their purchase to make sure they’re happy with their purchase and the service they got.

Most customers will be happy that you took the time to follow up. If they had a negative experience and you can fix it, you may acquire a returning customer.

No other trick in the world can replace excellent customer service. Make sure all of your employees are aware of this.

Loyalty Programs

What better way to encourage customers to come back than with a loyalty program?

There is no one-size-fits-all customer loyalty program. Maybe you offer 10% off each purchase for returning customers. Maybe you offer something for free after a certain number of visits.

One thing is certain. If you offer a punch-card loyalty program, always start with one extra punch for free. Why?

One study showed that customers who needed 10 punches for a free car wash but started with 2 free punches were more likely to earn a free car wash than customers who needed 8 punches and started with no free punches.

In each case, the customer needed to purchase 8 car washes. The psychology of this is called “artificial progress” and could do wonders for your business.

In any case, customer loyalty programs are a simple way to encourage people to do business with you again.


While upsells don’t necessarily ensure returning customers, they’re a great way to get more money from each new customer. Can you think of a complementary product or service to suggest to each client?

One example of an upsell would be a massage therapist who encourages adding essential oils to a massage for $10. For a small amount of product, you’re getting more money from customers who agree to the upsell.

Not every business lends itself well to upsells, but you should take advantage of them if you can. Upsells can also help customers think they’re getting more of what they need or more value for their money. This, in turn, may encourage loyalty.

Get to Know Your Customers

It’s much easier to upsell to your customers when you know more about them. Whether that’s through personal interactions or emails, the more you can get to know about your customers, the better.

The better you know your customers, the more you can customize offers to their preferences. You can recommend specific products or tailor special deals for customers with different tastes or buying habits.

Even if you don’t have a good way to learn about specific customers, surveys can give you some general guidelines.

What did customers like or dislike about their experience with your business? What do they value about your competitors? How can you better meet their needs?


For some businesses, you can’t rely much on returning customers. For example, people often wait 5-10 years between home, car, or mattress purchases.

With these types of businesses, referrals are free. You should encourage each customer to refer their friends and family to you.

This comes back to service. If you provide excellent service to every customer, they will be more likely to refer you to others. In this case, referrals are as good as returning customers. They’re also customers you get for free without paying for advertising.

Referrals are key for any business, not just those with long periods of time between purchases. As part of a loyalty program, you could offer existing customers a discount for each referral they send you. This can do double duty to encourage customers to return as well as refer you to others.

Need a Loan for Your Small Business?

First Union Lending loves helping small businesses succeed. Any type of business loan you might need to grow your business, First Union probably has.

We offer 9 business loan types to choose from, so you’re sure to find one that works for you. Our lending specialists available to help you find the best business loan.

To speak to our lending specialist about business loan types, call 863-825-5626 or click here.

You don’t need to be concerned about your credit. Applying for a business loan with First Union won’t affect it. Also, you could get your money as soon as the same day you apply.

Don’t wait. To discuss your options, contact First Union Lending today.

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