March 14, 2012

Profiling the Loyal Customer

Profiling the Loyal Customer

Your loyal customers will never cleanly fit into a singular profile checklist. Customers’ motivations for loyalty vary greatly. Perhaps they stay because your product is consistently the best value in its marketplace. Or maybe they have extreme brand loyalty, like you see with Apple enthusiasts. Their buying habits may be steady as the sun or come in schizophrenic waves, which makes carefully timed coupons or sales an exercise in futility.

These customer differences raise challenges, but do your homework and you can uncover how your most loyal customers want to be approached, engaged and marketed to. This is the only way to get the most out of your current relationship and ensure it is lasting, but also continually evolving.

Create Individualized Profiles (aka Personas)

How can you maximize value from this powerful—but diverse—set of customers while simultaneously keeping them incredibly happy? Start with the database intelligence you have to catalog what you do know.

  • Set parameters for defining your business’s loyal customer; are spending habits important, longevity, referrals?
  • Mine your database to identify these loyal customers
  • Keep a comprehensive listing of these individuals or companies and update it quarterly
  • Give each customer a profile within the listing that highlights factors of importance to your business
  • (i.e., their anniversary, preferred products, desired form of communication, frequency of communications)
  • Look for clues to how this customer likes to be approached and managed; follow up with a personalized communication plan
  • Keep careful records of individual responses to outreach or rewards
  • Personalize next interactions based on actions that worked vs. those that went unnoticed

Recognition is key. You have to know who your loyal customers are before you can take any steps to acknowledge them. Your company’s past interaction with customers is the ultimate insider’s guide to discovering how customers like to be recognized and rewarded. Retrieving this information and building stewardship based on what you know will be time-consuming, but worth it.

It’s tempting to dismiss a loyalty recognition project of this magnitude, to say you don’t have time. Can you afford to not make this effort? Data repeatedly shows that the extra time it takes to keep a loyal customer happy pays off financially in the long run.

The Data on Customer Loyalty

We searched far and wide for the data that best drives this point home, and captured it along with expert insights in our ebook, “75 Customer Service Facts, Quotes and Statistics.” Below are a few excerpts of the data as well as one unforgettable quote that shows the value of a loyal customer.

On average, loyal customers are worth up to 10 times as much as their first purchase.
Source: White House Office of Consumer Affairs

Probability of Selling to a New Prospect: 5-20%
Probability of Selling to an Existing Customer: 60-70%
Source: Marketing Metrics

It is 6-7 times more expensive to acquire a new customer than it is to keep a current one.
Source: White House Office of Consumer Affairs

People want this level of engagement from the companies with which they do business … even the best of what formerly passed for good customer service is no longer enough. You have to be no less than a customer concierge, doing everything you can to make every one of your customers feel acknowledged, appreciated, and heard. You have to make them feel special, just like when your great-grandmother walked into Butcher Bob’s shop or bought her new hat, and you need to make people who aren’t your customers wish they were.

Gary Vaynerchuk, “The Thank You Economy”

Customer service is a dynamic concept. As it continues to change and evolve, your business should keep pace. Your loyal customers expect to be acknowledged and even occasionally rewarded. It’s imperative that your business make this recognition a priority … or as the data shows, it’ll cost you.

For additional reading on maximizing the customer experience for loyal customers, check out “What Customers Think” and “Power in a Personal Touch,” chapters 2 and 3 of our free ebook.

Download now »

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1 Comment

Jessie Nov 1

I agree that customer service and business in general has been involving for quite some time and for those who cannot innovative and change usually go out of business quicker then others. I really like all the data you found.... Really shows how much businesses should value a loyal customer as well.

-Thanks

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