The managing of customers in your database is of equal if not greater importance than the management of the products and services you generate. Careful monitoring and review of the relationship fostered between you and your customers plays a critical role in retaining their business. Consider how wants and needs might differ among them, and how those differences might influence their purchasing patterns and behaviors. Over time, it becomes apparent that some customers are more valuable than others and purchase more often and make larger purchases (and by that same logic, it may be revealed that other customers may not be worth quite as much as the attention they have been receiving thus far). So it’s important for companies to understand the needs of customers within different profitability tiers and adjust their service levels accordingly.
Spend your resources identifying and interacting with your best (high-value) customers—these are not necessarily the customers who spend the most money. Some of the customers who spend the most won’t be profitable (they’ll be the ones getting the highest discounts and requiring the most support). Your most profitable customers are those acting as brand advocates spreading credible, positive word-of-mouth. They’ll buy across product lines and be willing to pay full price.
Target those who represent the best opportunity. That precious time and energy is better served in assessing and analyzing what loyal customers you already have, and using that information to develop a unique, personalized customer experience. With all the data gleaned from your database, you can tailor any email marketing messages you send out to a particular person in such a way that indicates the existence of a good customer-company relationship. Such personalization provides added value for the consumer, potentially earning more business from them over their lifetime. Additionally, by integrating email with CRM data, marketers can identify their most profitable customers and automate relevant marketing programs based on key events, web analytics data, purchase activity, or other relevant data attributes.
On the other side of the marketing table, the attention paid to the relationship a customer enjoys is of great benefit to her as well. At the very least, it gives her the impression that you care about the problems she’s facing. She comes to understand how important she is to your business and how her needs must be met in order for you to achieve success. With a solid customer-company relationship in place, trust and confidence can be established with a particular brand and/or product, simplifying any decisions she may have to make between identical products, as well as feeling assured that the company she conducted business with will provide the product or service she needs.
Once you have identified who your most profitable customers are and start addressing their needs specifically, your whole business strategy becomes more focused on the type of individual who already demonstrates the most real income to your business.
Read the follow-up blog post…I tell you how to identify your most profitable customers!