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The best ways to create repeat customers

The best ways to create repeat customers Jay Friedman

I wouldn't blame you if, at first glance, you tilted your head and did a Scooby-Doo at this headline. Marketing surely can help generate interest and trial. But doesn't the product itself drive repeat purchases? I mean, you didn't see a lot of repeat Yugo owners. However, even great products need marketing help to achieve loyalty and drive repeat purchases.

The best products don't need (much) advertising to sell the first product, let alone create repeat customers. Look at Huy Fong's famous Sriracha hot sauce. Or Costco. Both are cult or near-cult brands that essentially do no advertising. However, that doesn't mean they aren't smart marketers. Is the product you're marketing day-in and day-out a cult brand favorite? It's more likely you're in with the other 99 percent of us, and as a result, marketing and advertising are both vital to the success of the brand(s) you work with. So how do we use marketing and advertising to drive success and loyalty?

The best ways to create repeat customers

Marketing is inextricable from product development

Before the dawn of modern medicine, elixirs could be found claiming to treat nearly any disease. Without online consumer reviews, these products could be sold, rebranded, and put on the shelves again without retribution. It's clearly very different today. Between government regulation, the internet, and social media, bad products don't last long. The first key to repeat customers is, in fact, a good product. To build this great product, though, marketing must be a part of the research, development, and concept phases. Today's most valuable marketing vendors don't just create and place ads, they respect the entire customer journey and experience. They help craft ad messages around the desired emotional connection a consumer will experience with a brand.

It starts by examining every possible consumer touchpoint. This includes the physical store and/or website experience, the call center, and even the product's design. Let's also not forget the advertising. It doesn't do any good for an airline to advertise its new in-seat entertainment across all its advertising if just 1 percent of its fleet is equipped with this technology. Simply put, aligning consumer expectations driven by marketing with the reality of the product is important.

While this "kumbaya" is desirable, it's not realistic in many organizations. Instead, there are practical things you can start doing today that don't require your company to change the way it operates or how it gathers input on major decisions. Sitting at the dawn of a golden age of neuro-marketing and behavioral economics, we're now putting together simple changes we can make to our marketing strategy that then create many more repeat customers.

Turning art into science with behavioral economics

Christophe Morin coined the phrase, "The buy button in your brain." Activating that buy button is exactly what the best marketers are doing today. Let's start with a punch-style restaurant loyalty card. Each purchase nets you a punch. After 10, you get a free entrée. To the business, this is essentially an ongoing loyalty program that ensures repeat visitors. To consumers, it's a game. That's why, when two different punch card approaches were tested against each other, one was a clear winner. One was a 10-space punch card. After purchasing the first entrée, the customer received their card with one punch in it. The other was a 12-space punch card. When the customer purchased the first entrée, the server gave them the punch card with three spaces punched. Two freebies with a wink and a look of, "I got you a head start," and of course, the third punch for the entrée today.

Head starts win loyalty

There is no rational reason to suggest one punch card approach is better than the other. The consumer has nine punches to go either way, and they've only spent the money on one entrée so far. However, in a study conducted by Ran Kivetz, a professor at Columbia Business School, customers finished their cards nearly 20 percent faster when given a card that was 25 percent complete (three out of 12) rather than 10 percent complete (one out of 10.) If you're going to discount, do it hyperbolically!


Continuing along the "competitive nature" path, consider Kohl's use of price anchoring and coupon stacking. The list price for a shirt at Kohl's may be $59.99. But everything in the store is 40 percent off, and you can bring in coupons that further reduce that product's price. Perhaps the shirt would be priced at another store for $19.99. But consumers so enjoy receiving "perceived discounts" they'll actually be happier buying the product for $21.72 after stacking coupons. There's a reason Saturn's "what you see is what you get" pricing approach didn't stick in the automotive world.

Reputation and inferred endorsements

We touched on reputation earlier, but let's look at a real-world example. Reputation can be inferred in many ways. Examples include online reviews, a line that extends out of the restaurant, or a celebrity endorsement. When Kate Upton wore a pair of Tacori earrings to a movie premiere, People Magazine took note and published a picture. Between Kate wearing the jewelry and People's credibility, consumers assumed an endorsement by the star for the brand. The result was a massive spike in traffic to Tacori's website -- good news for the brand.


Of course, what do some people want more than anything? That which they can't have. Automotive is a gigantic advertising category, but one entire segment of cars never needs to be advertised, yet every single car is pre-sold. Supercars like the Ford GT, Lexus LFA, or Porsche 918 sell out without a dollar of advertising because buyers know there are limited quantities available. No one worries about whether or not there will be an F-150 on the lot tomorrow, but with a waiting list for a supercar, deposits are made sight-unseen for these high-prestige, limited-production automobiles. What can be done with your brand or product to create scarcity? You'll find it in the most commoditized products. A special blend of coffee, certain seats on an airline, or opening a store early to launch a new product exclusively for your best customers are all ways to create scarcity -- or at least the illusion of it -- to drive purchase and repeat purchase.

Loss prevention: It's not about mall cops anymore

The first thing many people think of when they hear "loss prevention" is mall cops. Then they may think Paul Blart, and it just unravels from there. But when talking about the buy button in a customer's brain, loss prevention takes on an entirely new meaning. Consumers will always focus first on loss avoidance over gain achievement. This can occur in business when making $100,000 purchase decisions, or even with a $4 bottle of body wash. We play games in our minds to rationalize a choice. Let's imagine a 35-year old married man standing in the body wash aisle deciding on which brand to buy. Here is a not-uncommon line of thinking:

  1. Huh, this new brand is cool. I think I might try it out.

  2. Although, if I try something new, my wife will ask me why I am trying something new. Or she'll at least want to have a conversation about it.

  3. I don't really want to talk about it. Plus, I'm not sure what this new one smells like once I'm out of the shower. At least I know what my current one smells like.

  4. Is this new one going to last as long as the one I use now?

  5. What exactly is wrong with my current brand again?

The result? The original brand is placed in the shopping cart.

What caused the buyer to even consider the change? It likely had to do with marketing. Whether product packaging, advertising, or brand reputation, something triggered the consideration. What that marketing didn't do was provide an emotional reason to show the buyer that his life would be significantly better with the new brand, or at least significant enough to make it worth the cost of venturing into the unknown. This man avoids losing the known despite initially wanting to try something new. Conversely, the status quo brand the man is using did enough with its marketing to keep the customer. It created a product good enough to keep customers loyal.

Going forward

With the advanced knowledge we now possess regarding how consumers make shopping decisions, marketers must be metaphorically surgical in activating a customer's emotions. This is the best way to create repeat customers. Advertising is but one small part of the marketing spectrum. Marketers need to be highly coordinated in weaving together the various marketing functions to create a cohesive, harmonious approach toward achieving the ultimate customer loyalty.

Jay Friedman is the COO of Goodway Group.

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"Customer Retention - letters on wooden desk with laptop computer and a notebook" image via Shutterstock.

Jay Friedman is COO of Goodway Group, and a partner in the 3rd-generation family company founded by Milton Wolk in 1929. Friedman joined in 2006 to add a digital media component to Goodway’s offerings, beyond the existing print and promotional...

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