Every sale matters, but businesses see various types of customers creating those sales. Some are loyal diehards who’s receipts show high purchasing value, while others make an occasional one-time purchase. So, which end of that spectrum should your business be investing in?
It’s a common misconception that businesses should focus on turning the casual customer into a loyal one. While that can help boost your bottom line to a degree, there’s more value in investing in your most valuable customers. Here’s what you need to know.
Identifying Valuable Customers
Before you decide to invest in your most valuable customers, you have to identify who they are. Big budget spenders are the easiest to identify, those who routinely spend ample amounts of cash at your business over the course of a year, but there are other areas that build value as well.
Returning customers, even those who do not spend big, are highly valuable as they hold a level of brand loyalty. Someone spending $30 a week is equally as valuable as someone who spends $300 every so many months, for example.
Finally, there’s the online realm. Customers who enjoy sharing your social media content and those who provide feedback are vital to the growth of your business. Both show support, brand loyalty, and allow you to see what avenues contribute to better growth as well as what you can change to make a better customer experience.
The Reason to Invest
Each of the categories above have one thing in common, and that’s loyalty. The more devoted a customer is your business and brand, the better it is for your bottom line. Here are a few statistics to show the importance of making this investment:
- Your business is 14 times more likely to sell to an existing customer as opposed to a new one
- Increasing customer retention by just 5% translated to a minimum of 25% in profit increase
- Loyal customers are more willing to try new products by 50%
- Loyal customers spend 31% more on average
- Focusing on new customer acquisition costs 50% as much as it did just five years ago
- 77% of valuable customers market your brand for you via word-of-mouth recommendations
These statistics show that investing in your most valuable customers pays off big time when it comes to growing your business. That increased growth can be used to retain new, loyal customers or go to wherever else your business might need it.
Making the Investment
The key to making this investment is in managing value. There are various approaches to making this work, but the simplest is in how your brand communicates with its four value groups. For your big spenders and regulars, it’s all about making them feel special.
Reminders, checking in on their satisfaction with large purchases, and keeping them updated about promotions or updates go a long way in strengthening the relationship they have with your brand. Personalized email messages and rewards such as point programs and coupons help, too.
For your customers showing high levels of loyalty online, interact with them. Thank them for a share via messaging apps, engage with them in the comment sections, and show them that you take their feedback to heart. The more you strengthen the bond you have to these high-value customers, the more you’ll see your business flourish.