Dear valued customer...
What if only 10 customers truly mattered to your business? What would you do? Would you send them a special birthday present? Would you find out what football team they support and have them meet the players?
In the 90s Don Peppers and Martha Rogers first asked the question of whether some customers are significantly more valuable than others? Valuable in the sense of revenues and profits you generate from them, valuable in the sense of recommendations they give and valuable in the sense of the brand advocacy they give. In today’s world where consumers can choose with ease who they want to engage with, loyalty is becoming more and more the elusive prize of marketing.
With today’s technology and data infrastructure, knowing your top 100 or top 1,000 customers well and treating them in individual ways it not outside the realm of possibility. Yet it does require you to know them and identify them. Do you know them? If yes, skip to the next paragraph to learn about what to do with them. If not, sit down with your analytics or data department.
The simplest way to determine your best customers is to look at last year’s sales. If you have them at a customer level, rank your customers descendingly based on their total sales. If you want to add some complexity you can develop a Recency Frequency Value segmentation.
The logic says those customers who spend the most recent with you, buy the most often and spend the most and are therefore your best customers. This approach ensures that you don’t focus your efforts on customers that at one point bought a lot but now have either left or no longer have a need. Once you have identified your customers the goal is to learn as much about them as possible. Their age, their geo location, the products/services they buy, how engaged they are with your communications, their GDPR consent, etc.
Based on this profiling you should get a good picture of who they are and what they want. Want to be especially diligent? Invite some of your top customers and those in the 2nd tier to a focus group. Learn more about their motivations and needs as this is crucial to build relevant engagement. You might think that this is a lot of work, but if you consider that 20% of your customers are driving 80% of your profit, investing resources to understand them makes a lot of economic sense.
If you know your top 1,000 customers, how do you show them that they are your best customers? Do you have special offers for them? Special products or services? Special anything? You might have a loyalty programme in place where the more a customer spends the more points/benefits they get. But this is not what I have in mind. I am thinking of the classic surprise and delight, pioneered by the airlines in the 80s with impromptu upgrades to business class. Surprise and delight never gets old.
I have yet to meet a customer who does not like it. Just last year an iconic British brand serving the 50+ market gave a special Christmas hamper to their top customers, along with a hand-written note by their executives. The response? Customers answered with their own hand-written notes expressing their delight and gratefulness. The total cost of that activity: £5,000. In the scheme of multi-million marketing budget a drop in the ocean, yet the impact on the customer was significant.
Do you know the 10 – 1,000 customers who truly matter to your business? And if so, are you looking after them?
Swantje’s passion is the customer. Over the past 15 years she has worked across industries focusing on understanding her customers with the sole aim to make their experiences exceptional. She is a firm believer in using the power of data to guide her thoughts but relies on her intuition to infuse the human side into any strategy she creates....