Inside Small Business | Small Business & Home Business Marketing

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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Raving Fans and Loyal Customers = More Sales (Pt.1)

Thomas Shaw

Generating loyal customers is the pinnacle goal of any business as it means return business. All great business owners know return business is not only less expensive to generate but also more profitable. It’s easy to get the words promotion and loyalty confused; promotions generate one-time or transactional sales. Loyal customers generate relationship-based sales.

Loyal customers often have an attachment to the brand, service, product or all three usually beyond just the tangible, it becomes emotional. Good examples include: a favorite family restaurant, the morning cereal, or your first mobile phone.

How do you determine the best way to generate customer loyalty? How do you know it is working? How much should you pay to generate that loyalty? The answers are through detailed customer interaction and transactions your customers will answer that for you, and I’ll show you how.

Generating Customer Loyalty, Start with Segmentation

Many will say loyalty starts at the transaction; I propose it begins before the customer knows they will make a transaction. Businesses need to understand their customer groups are as different as the cars they drive and know the key attributes to deliver their customers before their customers know it.

Step 1) Segment Your Customers – Break Your Customers Into Easy to Understand Groups. Take the main differences, wants, needs, attributes or sometimes called psychographics, but only the 4 or 5 defining attributes.

Segmenting allows you and your organization to understand the differences, group them and name them to discuss them. If you don’t know the differences or have not measured them through research or survey, do it. If you are a small business, get all your customers to complete a survey and rank the main areas: Product, Price, Service, Overall Experience, Cleanliness, or Expedience, add those attributes that are key to your competitive attributes and differentiation. Add the questions, no more than 10 to your registration page.

For example, you may find you have 3 groups of retail website customers:

Holiday Expediters – Who want their product fast, regardless of a 10% increase in price, typically before a major holiday or event. Avg 3 sales per six months.

Big Spenders - 6 or more sales every six months.

Impulse Buyers – The one time purchase that caught their eye. Has capacity to become a Big Spender.

About Thomas Shaw: A marketing innovator recognized as one of the most influential marketing bloggers, by Ogilvy and Mather 2007-2008. He has held senior marketing roles in the financial services vertical driving brand awareness, sports sponsorship, mass media and direct response campaigns while leading and motivating departments of over 100 people. A former ad agency veteran he delivers a business development and strategic approach to marketing with hands-on experience. His nationally recognized blog is at www.MarketingExecutive.biz

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