Follow The Money Trail: All Customers Not Created Equal
- Customers who purchase your products or services are notoriously unequal. Some spend more; others spend less. Those who purchase more often are also more likely to spend more money. They are your regulars – your high-frequency customers.
- Every business category has them, but do you know who they are? Are they segmented from the rest of your customer base?
- The gold mine is in recognizing these frequent buyers. They play a key role in your company's profit picture.
- Over a period of time, they could spend more than fifty times what "one-timers" spend.
When your most frequent customers and clients are offered additional value, they'll pay for it. A group of your high-frequency purchasers that normally make up, for example, 30 percent of your profit gives you a potential opportunity to double that to 60 percent.
Recognize your best customers and profit potential.
Segmenting your customers by their buying habits is the first step in determining how to leverage your best customers. It is easier to sell to an existing customer than to gain new business. Would you change your marketing efforts if you see a purchasing pattern when you look at your sales by knowing frequency of customer purchases?
Knowing your primary target is first level of analysis. Digging deeper into customer demographics will reveal more about who your best customers are and what they respond to. With that information you can evaluate your marketing plans ability to reach your repeat customers.
Would changing how and where you are spending you marketing budget return bigger profits if you focus on the right customer? Yes, unquestionably. The richer the data on your customers the better you can focus your marketing budget and gain a greater ROI. Even with highly focused marketing you will hit fringe customers.
Aiming for a broad customer demographic does not guaranteed your message gets in front of the higher quality customer.
Today it takes more than 40 impressions (number of times your message is in front of your customer) to register with the customer. I recall a marketing rule of thumb that you have to say your business name 7 times in a 60 second commercial to insure the listening audience knows who is advertising, that is, if they are listening.
Radio, print, TV and even on-line marketing can not guarantee your target will see or hear your ad. The highest probability of your customer seeing your ad is through mail, emails and texting, the primary tools of direct marketing. These require you have their contact information and in the case of electronic delivery (emails and texts) that the person has opted in. I have always favored direct response marketing, those efforts which have the biggest chance of being seen and request a response.
Your marketing plans and efforts should use as many platforms as you can support. Those companies who depend on only one marketing platform to touch potential customers is like having one billboard on a country road. The easy way is to market the way you always have. That is ignoring the facts that technology has affected every industry and forced retailers to change and some go out-of-business. Today you need to integrate digital platforms into your marketing plan.
Ask your best customers how they want to be reached and how they shop. Use that to weigh the merits of PPC, blogging, direct mail, etc. for your marketing success. Innovating will bring new opportunities and knowledge and allow you to stay competitive. Waiting to see what the competition is doing is a recipe for disaster as history has proven for Circuit City.
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