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Flip the Funnel: How to Use Existing Customers to Gain New Ones by Joseph Jaffe

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REPEAT PURCHASE BEGETS REPEAT PURCHASE

Surprising fact: Just 12 percent of shoppers23 are responsible for 80 percent of Coke sales, 6.5 percent of shoppers account for 80 percent of Diet Coke sales, and less than 3 percent cover 80 percent of Coke Zero sales. Who do you think these sales are coming from: new or returning customers?
Do you know what percentage of your total number of purchases come from the same—in other words, returning—customers? If it’s higher than two-thirds of your total sales—and more often than not, it will be—ask yourself: “What am I doing to address the people who come back to buy again and again and again?” On the flipside when we take repeat customers for granted, at some point, they’re going to ask, “What have you done for me lately?” They’re going to feel unappreciated, taken advantage of, and essentially abused. And we hasten this process by heaping endless discounts and perks on new customers, thereby basically slapping our existing loyal customers in the face.
At some point, these loyal customers are going to turn their backs on us—for good. At least, they might, and just the threat or possibility of that happening should have us all scuttling like crazy to our battle stations to make sure this never occurs.
One obvious way to avoid this is to reward our customers. Loyalty programs have long been the expression of this kind of best practice. Frequent-flier programs are the perfect way to segment repeat customers into tiers based on their patronage ...

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