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| Targeting Top Customers |
Author: Geoffrey Michael
Friday, October 30, 2015 |
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A majority of small businesses derive three-quarters of their sales from just one-quarter of their customers, so the message is clear. Holding onto your most loyal customers must be a top priority, and understanding their spending habits is critical to your success. Keep those customers front and center when developing marketing campaigns, promotional strategies and expansion plans.
Focusing on your best customers doesn’t mean you scale back efforts to attract new ones. It means you don’t take them for granted and assume they’ll continue their historical spending patterns. The key is to identify your most valuable customers and the opportunities they represent, and develop relationships that will keep them coming back. It’s not as simple as it sounds, but it’s definitely worth the time and effort to make it happen. Data miningAutomation has made data collection a fairly straightforward process, so there’s no reason why you can’t take full advantage of its benefits. The main reason you need detailed data about your customers is to enable the best targeted marketing possible. The following list contains the basic information you should obtain: - Name, address and contact info – Enables direct, personalized communication and follow-up if needed.
- Personal details – Gender, age, birth date, income, employment. Get as much of this info as possible on all your customers to build a composite picture of your typical customer.
- Interests – Know their hobbies, sports activities, and how they spend their free time. This allows you to cater to their special interests, focus your marketing campaigns, and develop affiliate and sponsorship opportunities.
- Purchase history – Know the products they buy the most and personal preferences (frequency, timing, dollar value). Understand their spending habits and tag them as impulse buyers, comparative shoppers, considered purchasers or regular customers. This helps with the development of pricing and promotional strategies.
- Payment history – Know their primary payment method and ability to pay on time.
- Communications – Keep track of customer responses to your outgoing communications and use this to maximize effectiveness and timing for future communications.
Collecting dataSome of this information may be difficult to collect due to legitimate privacy concerns, but get as much of it as possible without harassing your customers. Bigger companies hire market research firms to perform this task, but it’s not necessary if you set up an online database to catalog the data as you go along. Make sure you’re in compliance with all federal, state and local laws regarding data collection and storage. - Orders – Customers have a built-in reluctance to give up any more than the minimum information necessary to complete a transaction. Set up a section for “optional” information and explain that it will be used only by you in your efforts to personalize product offerings and services. Encourage customers to register with your website so they don’t have to reenter all their information every time they visit. If you’re true to your word, mutual trust will build over time enabling you to expand your collection efforts.
- Competitions – Periodically, run a contest that awards prizes to the winners. In the process of signing up, potential customers will hand over valuable information in exchange for a chance to win. Don’t ask for more than their name, email address, and zip code because anything more than that may scare them off. That’s all the information you need in the beginning and you can always ask for more later on.
- Surveys – These represent a backdoor way of getting information and many consumers are wary of them. Politicians routinely send out surveys and at the very end is always a request for donations to whatever cause they’re pushing. If you use this approach, make it totally genuine and directly connected to your business. Promise to distribute the results of the survey to all participants and follow through on your promise.
- Research – Use existing market research to identify demographic patterns and emerging trends. Although these aren’t unique to your specific business, they can provide statistical data to help your analysis of overall business conditions and forecasts.
AnalysisAn important step in influencing consumer behavior is to understand the dynamics of your current customer base. Use the data you’ve collected to isolate the personal and shopping characteristics of your best customers. For example, you may find that most of them are in a certain age range. Take that information and design marketing and pricing strategies that attract and reward customers in that demographic. Develop communication programs that entice returning customers and step up the spending of loyal customers. Use your database to target specific products and pricing at the most optimum times during the year.
Connecting
Participate in online forums related to your business and offer free samples to those expressing genuine interest. Answer questions but don’t create pressure by actively promoting your products. Let your website speak for itself. If they like what they see, the people who participate in such forums will spread the word to all their contacts through a variety of social media platforms.
Encourage feedback through your website and review it regularly. You’ll receive bonus points if you personally respond to the comments. Allow visitors to sign up for your email bulletins, but make it clear that they can always opt out of any and all communications.
Summary
You don’t have to spend a lot of money to make your customers feel special. It’s easy to set up automated birthday notes via email or text. Adding personal touches reminds people that you’re not taking them for granted.
You want to hold onto customers who generate revenue and profit, and are highly satisfied. The trick is to do this without seeming intrusive and overbearing. The best way to avoid this trap is to put yourself in their shoes and ask what would offend you. Use common sense as your recipe for determining where to draw the line.
There may be no better advertising than satisfied customers who advocate and endorse your business. Build lasting relationships with them and watch what happens.
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