I’m a regular buyer from a popular high street brand. Every month, I spend probably £30-£50 with them using my store card. My husband has a store card too but he can go many months without buying anything.
The trouble is, he gets lots of discount vouchers to encourage him to buy more. Little do the high street brand know that I live in the same house with him. I don’t get vouchers, they think I don’t need them because I buy without being nudged. It kind of annoyed me so I buy less from them, and alas, discount vouchers addressed to me have started arriving!
As a marketing professional, I have a good idea what this brand has done. They’ve used customer segmentation techniques to divide their market to allow them to push more sales to potential high-value customers and inadvertently ignored already high-value customers. I don’t know if they’ve taken the right approach as I don’t have enough information about their customer base.
Using customer loyalty and lifetime value, here are four types of customers you will find in your growing business and some ideas on how to engage them:
Type 1 Customers: Supporter Sam
The Supporter champions your product. He is a current or previous customer who had good experiences working with your company or product. They are loyal and will tell their peers about you, recommending you whenever possible.
However, they often have a low lifetime value due to tight budgets or slow sales cycles. They might not buy regularly or might not renew their services with you at the end of a period. But if you have treated them well, they could be your biggest champions. For instance, these customers are a rich source of case studies and testimonials.
Keep these customers informed of new products and services. Invite them to customer update meetings, add them to your email list, your advisory board and support them as they use your products/services even if they might not buy more in the short term.
Type 2 Customers: Partner Patsy
Partners love your company and your product. They are also a high-value customer that provide your business with many opportunities for upselling.
These customers are likely to be medium-sized organisations that have grown with your business. They are unlikely to have a centralised structure so decisions are made quickly and locally. This is your dream customer because they not only buy but they also recommend you to their peers.
Give these customers a single focal point for their support needs e.g. a dedicated account manager or customer support executive. Officially ask for their input to your product roadmap. These customers will be demanding if they are spending a lot with you. So keep them in the loop on any changes to your business or service in advance. Remember that the main champion of your product/service within their business needs to keep advocating for you so give he or she as much help as possible to do that.
Type 3 Customers: Celebrity Charlie
Celebrity customers are a tricky group to manage. This is because they are high-value but they are not loyal customers. They sometimes buy on impulse or they buy because there were no other options.
However, they will not easily agree to give you testimonials. A case study is almost impossible to get from this customer, no matter how good your product or service is.
Ensure that you provide the best customer experience possible throughout the buying process but don’t spend too much overhead on keeping them unless you get an inkling that they are potentially Partner Patsys. Provide existing use cases and case studies to highlight your credibility with this customer. Many Celebrity Charlies end up being Partner Patsys if you can provide a great customer experience, support and a differentiated value proposition.
Type 4 Customers: Ex Eric a.k.a The Ex
We all know these types of customers. And they are great to have in the business for a time but they tend to cost more than they bring in.
They are usually low-value, meaning that they don’t spend much with you and their long-term financial outlook suggests that they will not be in a position to increase their spending. They are not loyal either, which makes them different from Supporter Sam. Ex Erics will usually ask for a significant discount and will be motivated more by price than value.
Keep Ex Eric happy by bringing him on board with a discounted offer. Then show him the value you can bring his business in terms of extra perks and support. Avoid spending on unnecessary expenses to acquire this client because customer lifetime value to customer acquisition costs will be very low, and hence unsustainable. For instance, don’t pay for sales people to fly to another country to meet this customer. Offer a video conference instead.
Any there any other types of customers that you can think of? Tell us in the comments.
All ilustrations by Yekemi Otaru
Feature photo credit: iStock/Getty Images