OPTIMIZE FOR THE NEXT REPEAT PURCHASE
How much does it cost to acquire 1 customer? $50? $80?
Say you optimized for immediate margins. Being efficient with the first transaction, you earned $120 profit… at the expense of losing repeat business.
You could be running a restaurant, consultancy, or software business.
Whichever the case is, you have customer acquisition costs and a lifetime value per customer.
While we want new customers plus repeat purchases, retention is so underestimated.
It costs money to get a stranger in the shop. It costs money to build rapport. It costs money to understand a client’s specific needs. It costs so much money to turn them into advocates.
Now, optimizing for 7 repeat purchases does not feel too actionable.
What do you do instead?
Optimize for the next repeat purchase. Always.
For each transaction:
- Put forward their satisfaction rather than milking the cow
- Always offer an incentive to go back
- Customize the incentive based on where they are in the journey (1st visit, 2nd visit, etc)