How To Make First Time Customers Into Long Term Buyers


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In almost any business, the chances of losing a customer during the first year is almost twice as high as for those who have been customers for awhile. That makes sense when you think about it. Whether it’s a retail store, an ecommerce site or a supplier of business-to-business services, the scenario is the same. New customers are more vulnerable to competition and require greater attention. A strategy is necessary to make a customer feel welcomed, important and appreciated. But, just as critical, new customers should be given special considerations that even they may not know is essential; for instance, if there is an issue and it is not quickly resolved, the potential loyal customer could be lost.

Before starting my own business, I was a vice president at ADP, the largest payroll service provider in the world. ADP always measured overall service satisfaction and first year retention specifically. It was one of their standard metrics whereby general managers were held accountable and incentivized. During the early 1970’s when it was discovered that the first year retention rate was significantly lower than the average account tenure, of course the question was, why? A predominate issue was who to contact if there was a problem and how long did it take to resolve the issue. ADP wisely created a department called New Accounts and its Coordinator assigned a specific representative to be in charge of recently acquired accounts. Those customers received a special number to call and were handled with kid gloves. The representatives were given additional training to assist the new accounts and provide a smooth transition to a larger customer service team once they were on board for at least three months. After the first year this program was implemented, new account losses were cut in half.

Building on my personal experiences with numerous organizations, I would recommend the following for any business:

  • When you know that someone just signed up for a service, used your ecommerce site for the first time or just happened to walk into your store and purchased merchandise, make them feel especially valued and tell them their business is and will be appreciated.
  • Educate new customers on your hours, policies, where you get your merchandise, and how the staff is trained to treat customers.
  • Assign one person or a small department to handle inquiries and concerns from new customers.
  • Initiate follow-up calls or emails with first time purchasers, acknowledging they are new and finding out about their initial experience.
  • Think of the potential lifetime revenue for each customer as opposed to considering each purchase by a customer as a single and unique event.
  • Create relationships by having frontline associates make a personal connection, helping to build long-term customer interactions.
  • Measure the attrition rate for first time accounts or customers; inspecting what you expect always helps to focus an organization’s most critical priorities.

Heed the lessons learned: understand and appreciate the needs of a first time customer. Give them the time and attention they deserve and you will be rewarded with long term loyalty.

Republished with author's permission from original post.

Richard Shapiro
Richard R. Shapiro is Founder and President of The Center For Client Retention (TCFCR) and a leading authority in the area of customer satisfaction and loyalty. For 28 years, Richard has spearheaded the research conducted with thousands of customers from Fortune 100 and 500 companies compiling the ingredients of customer loyalty and what drives repeat business. His first book was The Welcomer Edge: Unlocking the Secrets to Repeat Business and The Endangered Customer: 8 Steps to Guarantee Repeat Business was released February, 2016.


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