Raving Fans and Loyal Customers = More Sales (Pt.3)

Thomas Shaw

Step 3) Dive deeper into the needs of the groups

You’ve identified your groups, now you’ve put them on a logical continuum or lifecycle to understand how they evolve – now what do they want?

When someone walks in a store, visits a website from one of these groups they are looking for 2 – 3 core items.

For Example: Holiday Expediters want:

1. Next day shipping is required as their #1 item and will pay for it

2. Prices do not need to inexpensive, only competitive

3. Reminders or wish lists are appreciated during Holidays

Step 4) Knowing the Group’s Needs, Can You Provide Service that differentiates and leads to Loyalty.

For Example: Holiday Expediters

Knowing they want next day delivery, would they want/desire immediate delivery or local pickup?

Step 5) Market Relentlessly to your customer’s needs. Marketing more effectively in this manner lowers cost per sales / acquisition costs substantially.

Marketing to your segments at the right time with the right message is crucial. For example, you may choose to not market to Holiday Expediters about your new product. However, your Big Spenders would want to know immediately about any new products.

Measuring Loyalty by Segments

Now you can see why segments are important. They provide a meaningful way for organizations to develop products, market and discuss strategy.

A key idea in measuring loyalty is determining what “Loyalty” is for your organization. In some markets, loyalty is a multi-year, multi-sale relationship. In others it is a 18 month cycle and the goal is to continue business with the customer for at least 18 months.

Be clear and honest about what loyalty means to your organization and be clear about the benefit of establishing and driving that loyalty.

For example: “Customers that remain with the organization for 18 months cover the margin goals for the quarter. For every 2 months beyond 18 a customer stays, we enjoy a 5% incremental monthly margin”

Ideally loyalty is beyond sales. It is about the emotional attachment to the brand, service or product. And that can be hard to measure.

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Raving Fans and Loyal Customers = More Sales (Pt.2)

Thomas Shaw

Step 2) Identify Patterns and Continuum (or Lifecycle) Attributes

This set of segments lends themselves to a continuum. Likely customers start as Impulse Buyers. Then some make it to Big Spenders while others become Holiday Expediters. Is there overlap, yes and that’s as far as we should go without getting more complex on overlap.

The point is clear, when you start approaching your customers with the goal of loyalty. Moving a customer from an Impulse Buyer to a Big Spender would be beneficial for the company. 1 sale vs 6 sales.
The next question is can you move Holiday Expediters to become Big Spenders? It is tough to answer and will require more investigation.

1. Holiday Expediters may be only obliged to buy at holidays for gifts

2. They may be purchasers outside your avg. age of Big Spenders

3. They may not have the capital to spend, avg. income or disposable income may be lower for this group

4. Possibly they view their purchase as holiday appropriate only

Again, to determine if they can become Big Spenders, these questions must be answered.

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