What are Recurring Clients? [A Complete Guide for Small Businesses]

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

Having recurring clients 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 clients?
  • How to gain recurring customers
  • Importance of recurring clients

Let’s get started.

What are Recurring Clients?

Recurring clients 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 customers are recurring customers 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 clients often create confusion with repeat clients.

Both recurring clients and repeating clients 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 customers of the grocery store are often considered repeat customers. Repeat customers are not predictable; they often buy the products as per their requirements.

The customers 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 clients.

How to Get Recurring Customers in 3 Ways

So we understand why you must focus on recurring clients, but how do you gain more recurring clients? 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 customers 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 customers 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 customers 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 customers into repeat customers by providing 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 clients. Want to consider using FacilePay for your small business?

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

Importance of Recurring Clients for Your Business

Now that you understand what recurring customers are, let’s discuss why recurring clients are important 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 clients 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 clients rave about it, thereby bring you loads of customers. Word-of-mouth marketing has worked for ages, and it’s proven effective over and over again. With repeat customers, you are saving lots of dollars in advertising. Loyal customers 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.

Frequently Asked Questions About Recurring Clients

  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 Clients 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 clients and recurring revenue, making your business profitable as well as sustainable.


Written by

Rakesh Patel

Rakesh Patel is the Founder and CEO of Facilepay (vBridge Technologies Inc). He has 28 years of IT experience in business strategies, operations and information technology. He has expertise in various aspects of business like project planning, sales, and marketing, and has successfully defined flawless business models for the clients. A techie by mind and a writer at heart, he has authored two books – Enterprise Mobility: Strategy and Solutions and A Guide To Open311.