Largest Single Impact on Business Profit for Businesses Models That Focus Around Repeat Business

Let me first explain what I mean by "Repeat Businesses":

What I mean by "Repeat Businesses" is that the business is in a industry/section of a industry which over 30% of the sales is often times repeat customers. I think the best way to explain this is using my own personal experience in previous businesses I founded and ran over the past 15 years: 

  1. Pool Supply Business - This is a repeat business as if you go a week without testing & treating your pool water. Let's just say the pool water won't be blue/aqua color anymore.... green is the color that will likely be the color...
  2. Mattress / Bed Store - This is not a repeat business. The industry 'recommends' to replace your mattress every 8 years (in reality though, the average is more like 12 years old). Seeing how businesses are very rare to even be in business that long... well, this is an extreme non-repeat business.
  3. Dog Food / - This is obviously a very common repeat business as just like people (which FYI: Groceries = repeat business), dogs eat and need toy to chew on and its very common that you need to buy dog food or go grocery shopping for yourself.
  4. Automative / Marine Industry - These are typically not considered repeat businesses; but, honestly these *can* be looked at like a repeat business as I know a few people who always order a new corvette every other year.... There are also 'sub-sets' within a industry which can be more 'repeat' style such as "Fuel", "Oil Changes", etc.. 

So clearly by reading the above 4 examples I gave, when I'm discussing 'Repeat Business' - to me, a 'repeat business' is a business in which a customer often requires monthly to bi-monthly purchases.... Ideally, I look at a repeat business as far as how I characterize a business and think of a business in which our average customer across ALL customers averages 3 purchases on a annual basis...

Remember that in the pool business, there are again 'sub-sets' that go the opposite way as well like a "Pool Heat Pump" for example. Pool Heat Pumps are VERY likely to last over 10 years without one issue. In general though.. Pools fit in that "Home & Garden Industry" in a way in which means they are a 'luxury' product, but once you build one or buy a home with one; then... well... you have a "Swimming Pool" so therefore seeing how the swimming pool has a direct effect on your real estate value - combined with the fact that for the majority of American's #1 asset is their real estate, clearly the "Swimming Pool" becomes very important and like a member of the family : ) 

To give anyone unfamiliar with a Swimming Pool as far as 'value' is concerned as far as real estate. The current average in-ground swimming pool build in America costs average $38,000. The minimum starting at about $25,000 and the maximum for a residential pool being in the $70K range (obviously there are multi-multi-million dollar residential pools; but I'm speaking in more broad terms.)


Great Infographic on Repeat Business by Constant Contact 
5 Reasons why repeat customers are better than new customers


 Now, Let me explain what I learned over the years owning all types of businesses and especially businesses w/ high repeat business:

(Note: I will continue to update this post as my mind wonders and things 'click' which normally happens when I'm the most busy - but writing is therapeutic to me and I also wanted to share more business information and just be more transparent as a business to our customers as, well... this actually fits well here - I was going to say that I wanted to be more transparent to our customers to help build that bond and emotional connection and "humanize" our Brand "Aqua Supercenter".... Its ironic as we started off in 2004 having to prove ourselves with a big fancy office and 35+ full time staff at one point around 2009 - 2014 to show that we were not like what most people thought of "Online Businesses" back then; which was that all online businesses were ran by people at home in their underwear..... Now, thanks to many companies but a Major Thanks to Amazon as their primary business is in online retail (our industry) and them being at one point the most valuable Companies in the World and still to the date of writing this, 1 of only 2 Corporations that have ever reached a value of over 1 Trillion US Dollars!)


I'm going to add more to this post over time as its been a busy day; so this is going to feel like a lot of build up for such a small piece but I wanted to explain this as I was just discussing this with a customer of ours. We believe in being a 'customer focused' business - not only focused on profit per order. Our management understands that we put customer relationships WAY above a single order's profit and thats why we can often times offer discounts, credits or even sell products below our cost to beat someone's price. 

At the end of the day, we value our customers. I can say that its unbelievable to me just how often I see a customer in our system and next to his name I see "3 Orders" or "7 Orders"... which is crazy to us as we have only had a system which actually told us like that for less than 6 months now.... On top of that, we have well over 1,000,000 customers in our database! 

I want to be transparent but I don't want to share exact personal numbers for our business which should remain private. This is not because its a 'secret' - its for another reason which I will probably write a post about; but for now, I'll just say in short: It's based on my history of founding well over 60 Corporations and at one point I was very transparent with my staff, team members, family, etc. and honestly; it caused a lot of un-needed drama and I learned from that mistake and not looking to repeat it.


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