As Steven correctly indicates, a while loop is the way to go, however, since both prompts offer a binary choice, you can encode a default option with no additional code, e.g.:
(while
(progn
(initget "Yes No")
(/= "No" (getkword "\nDo you want to continue with the next step? [Yes/No] <Yes>: "))
)
(initget 1 "Previous New")
(if (= "Previous" (getkword "\nContinue after the Previous position or start at a New postition? [Previous/New] <New>: "))
(princ "\nUser selected Previous.")
(princ "\nUser selected New.")
)
)