What is Recurring Customer? [A Complete Guide for Small Businesses]

    📝Key Takeaways:

  • Building a recurring customer base is essential for sustainable growth and long-term success.
  • To attract recurring customers, businesses need to focus on providing a high-quality customer experience and offering value.
  • Offering subscriptions or memberships can be an effective way to encourage recurring purchases.
  • Businesses should also use data and analytics to understand their customer’s behaviors and preferences, and use this information to personalize their marketing and sales efforts.

    📝Key Takeaways:

  • Building relationships with recurring customers can help increase donations and support for nonprofit organizations.
  • Personalizing communication and showing appreciation for donors can help create a sense of loyalty and commitment to the cause.
  • Offering different levels of recurring donation options can provide flexibility for supporters with varying financial situations.
  • Utilizing technology, such as automated emails and online dashboards, can help organizations manage recurring donations and stay connected with donors.

If you are a small business owner, you want to optimize the revenue stream.

Having recurring customers for your business streamlines your income and benefits your business. But, what is the recurring client, and how can it help your business?

From this blog, you will learn:

  • What are recurring customers?
  • How to gain recurring customers
  • Importance of recurring customers

Let’s get started.

What are Recurring Customers?

Recurring customers purchase your products and services on a regular schedule mainly on a subscription basis. Generally, recurring clients are predictable as they will continue to buy from your business consistently.

For example, a customer who subscribes to a streaming service spends $15 per month to watch unlimited movies and television programs on the application.

Amazon Prime users are recurring subscribers that regularly drive revenue to these businesses. Recurring customers are desirable because you can predict business revenue profits by the number of active subscriptions.

Most of the time recurring customers often create confusion with repeat customers. However, they are different.

Let’s understand.

Are Recurring Customers the Same as Repeat Customers?

No. Recurring customers are not the same as repeat customers. The difference between recurring customers and repeat customers is subtle and lies in predictability.

A repeat customer purchases your products more than twice but the date is not fixed. On the contrary, recurring customers purchase your service/product on a fixed date or time interval.

For instance: The buyers of the grocery store are often considered repeat customers. Repeat customers are not predictable; they often buy the products as per their requirements.

The users of cell phone service providers are often considered recurring customers. Each month the customer pays for service until the contract expires.

Here are some of the ways to gain more recurring customers.

How to Get Recurring Customers in 3 Ways

So we understand why you must focus on recurring customers, but how do you gain more recurring customers? Let’s see:

  1. Prioritize Exceptional Customer Support

  2. It is inevitable for businesses to deal with sticky customer situations from time to time. Having a team of dedicated customer support staff can provide great relief to the customer.

    Being cautious about customer grievances is an extremely important aspect of the growth of your business. Customers care a lot about getting their complaints across. If you do not attend to such complaints properly, the same customer might never buy from your business again.

    Here are the ways you can personalized and one-to-one customer support:

    • Provide demos and training: Offering comprehensive training and demos makes your customers comfortable with your products and services. While recorded training can be useful, live video chat helps your subscribers to get all their queries clarified and satisfied with your brand.
    • Personalized live support: One bad experience with your brand can likely switch your customer to a different brand. You can easily resolve such issues by providing extensive support to your customers through personalized live chat support.
    • Resolve problems through co-browsing: Sometimes it may happen that live chat or video tutorials may not help to resolve customer queries. In such a scenario, with co-browsing, your support team can gain access to the customer’s screen and resolve the issues within minutes.

    Apart from this, service-based business owners must also focus on sending appreciative emails or thank-you emails to loyal customers. You may need to check the top features of recurring billing software for your business. These small gestures go a long way in improving the brand experience for everyone subscribed to these services.

  3. Give Seasonal and Holiday Offers to Loyal Customers

  4. To keep the best customers hooked on your service for longer, you must provide them with occasional perks. This can include discounts, affiliate links, gift cards, customer loyalty programs, and more. Keep it simple but effective to encourage buyers to buy more. Customer loyalty programs influence their decision to buy again from the brand.

    Here are the ways you can offer discounts and incentives to your customers:

    • Provide onboarding offers: Your welcome screen needs to convey your value proposition in as few words as possible. When the customer boards on your product, provide free shipping or discount codes to provide a good experience.
    • Offers after first purchase: Provide discount codes and special offers after their first purchase. This will help them to make more purchases from your brand.
    • Keep experimenting: Every business and its customers are different. Hence, experiment with different offers and see what is most profitable for your business by giving you the most significant increase in customer retention rates.

    However, offering discounts to new customers after their first purchase can prove to be highly profitable for your business.

  5. Add Value by Performing Emails Marketing Campaigns

  6. Emails can be one of the most powerful tools to convert one-time users to recurring customers. Here are the tips that you can follow for email marketing.

    • Highlight customer experience: Send the email newsletter highlighting the customer satisfaction news and features of your product. You can even interview your loyal customers and feature them on your website, in your newsletter, and in other promotional materials.
    • Send follow-up emails: Once the customer purchases your service, send follow-up emails to ensure that they are always welcome to contact you for queries. Let them know that you have kept the communication channel open.
    • Keep your customers updated: Whenever any product/service is launched, keep your customers informed through emails. This will increase customer engagement and improve the customer experience.
    • Change your order confirmation email: You can turn your new users into repeat and recurring clients by providing information. Provide them information about related products, special offers, and discount coupons to your customers with the order confirmation email of their first purchase.

    These efforts enhance your products and services, making them one-of-a-kind. Another way of improving your products is by constantly seeking feedback from your existing clientele and tweaking your services to reflect the same.

    Small businesses like you prefer using FacilePay to manage recurring transactions to gain recurring customers. Want to consider using FacilePay for your small business?

Let’s even understand the reasons why recurring customers are important for your business.

Importance of Recurring Customers for Your Business

  1. Lowers Customer Retention Costs for Your Products

  2. According to business.com, acquiring new customers is more expensive than recurring customers. You can easily reduce by introducing a subscription-based payment model which reduces your customer acquisition cost.

    The subscription business model is a balance between getting new customers and keeping existing ones. Businesses focusing on marketing strategies that gain new customers and offer good service to retain them are leagues ahead of their competitors.

    Since customer acquisition is a big part of a business, large organizations run engaging advertising campaigns to attract new customers. But these customers may or may not buy your product or service. This is the big dilemma faced by all entrepreneurs.

    But with recurring customers, this uncertainty is eliminated as you know they are here to stay for at least a scheduled time in the future.

  3. Reduces Late or Missed Payments From Customers

  4. The most effective way to deal with late or missed payments is to prevent them from happening altogether, which you can do with recurring payments.

    Small businesses generally have to rely on receiving regular payments for their services. With recurring payments, customers provide you access to deduct fixed funds from the bank at regular intervals. This eliminates late payments.

    Once customers select a payment plan, they don’t have to manually make a payment each month; the recurring payment system does that instead. When your business expands, keeping up with invoicing can get challenging, so some customers never receive their invoices.

    When they adopt recurring billing, customers can choose between several plans, set up recurring payments, and continue using the service without worrying about forgotten invoices.

  5. Provides Word-of-mouth Marketing for Your Service

  6. How do you know that your product or service is top-notch? When your existing customers rave about it, thereby bringing you new users. Word-of-mouth marketing has worked for ages, and it’s proven effective over and over again. With repeat and retained clients, you are saving lots of dollars in advertising. Loyal and satisfied buyers promote business organically, leading to better scalability for your business.

    To take it a step further, you can offer your recurring customers limited edition seasonal products and bundles. During the gift-giving season, customers will be delighted to take advantage of all the special offers you provide.

Now that you have understood everything about recurring customers, there are still a few who assume repeat customers to recurring customers. To clear this misunderstanding, we have shown the differences between the two.

6 Differences Between Repeat Customers and Recurring Customers

Features Repeat Customers Recurring Customers
Customers who make multiple purchases over time
Varies, but typically less frequent than recurring customers
Long-term relationship with a brand
Can vary, but often high if brand provides consistent experience and quality
May be influenced by promotions, sales, or other factors
Contributes to revenue growth, but requires ongoing effort to retain

Frequently Asked Questions

  1. What is the recurring revenue business model?

    In the recurring revenue business model, the company provides its customer with a product or service in exchange for specific fees at regular intervals such as monthly, quarterly, or yearly. Subscription and membership-based businesses operate on the recurring revenue model.

  2. What is a recurring offer?

    Business renews the customer’s offers as per the billing cycle (monthly, annually, quarterly). The discounts that are applicable on these renewals are known as recurring discounts.

Ready to Leverage Recurring Customers for Your Business?

A common mistake that most small businesses make is that they only focus on bringing in more buyers. However, only concentrating on acquiring customers could lead to attracting only one-time buyers with a low spending level and lifetime value.

That’s the reason you must focus on retaining customers as well. One of the top ways to do that is to offer a subscription-based model, which encourages customers to keep coming back to you. Doing this will build a steady inflow of recurring customers and recurring revenue, making your business profitable as well as sustainable.

Author Bio
Rakesh Patel

Rakesh Patel, the founder and CEO of FacilePay, brings 28 years of IT experience in payment automation technology, business strategies, operations, and information technology to the table. With his extensive knowledge and expertise, he has created a trustable solution that helps to accept payments online. This has helped businesses of all sizes to receive payments quickly and securely. His commitment to simplifying the payment process has led FacilePay to be an ideal choice for businesses. His aim is to provide a seamless payment solution for various payment types, including e-commerce, subscriptions, and online donations. Read More